As we look back on 2021, there were some developments and emerging trends both in employment legislation across the country. Here are a few of the noteworthy changes:
a) Non-Competes
As previously reported, Bill 27 was introduced on October 25, 2021 and included an amendment to the ESA prohibiting non-compete agreements in employment contracts. The Bill was amended prior to passing to exclude executives, defined as “any person who holds the office of chief executive officer, president, chief administrative officer, chief operating officer, chief financial officer, chief information officer, chief legal officer, chief human resources officer or chief corporate development officer, or holds any other chief executive position”. As passed, Bill 27 also does not apply to employment contracts negotiated in the context of a sale of a business.
Non-compete agreement is defined broadly as “an agreement, or any part of an agreement, between an employer and an employee that prohibits the employee from engaging in any business, work, occupation, profession, project or other activity that is in competition with the employer’s business after the employment relationship between the employee and the employer ends.”
There are a few points to keep in mind when assessing the impact of Bill 27:
- The legislation does not purport to have retroactive effect.
- The legislation does not restrict confidentiality agreements that apply post termination.
- The legislation only applies to employment relationships, not commercial relationships.
- The legislation does not address common law obligations such as those owed by employees with fiduciary status.
The full impact of Bill 27 on restrictive covenants will be revealed over time as litigants have one more reason to oppose their enforceability. We anticipate challenges to agreements that pre-existed Bill 27 as well as assertions that non-solicitation agreements fall within the definition of “non-compete.” Employers concerned about protecting their competitive advantage should consider all alternative options to ensure that their proprietary information is secured.
b) Written Policies on Disconnecting from Work
Another feature of Bill 27 reported previously is the requirement that all employers with more than 25 employees implement a policy regarding disconnecting from work. The deadline for implementing the policy is six months from Royal Assent or June 2, 2022. As drafted, there are no exemptions.
The Act states that the contents of the policy will be “prescribed” which means that a regulation will be published setting out what a policy must address. The Regulation is expected in advance of the June 2, 2022, implementation deadline. Based on other jurisdictions that have similar legislation, we anticipate that regulation will address the following:
- The timing of communications and expectations for responding.
- Legitimate situations where it is necessary to contact employees outside of normal working hours including sick calls, emergencies or other circumstances where operational reasons require contact.
c) Deemed IDEL and Paid Sick Days Extended
On December 9, 2021, the government published Regulation 834/21 extending the “COVID-19 period” to July 30, 2022. With this extension, between March 1, 2020, and July 30, 2022, non-unionized employees whose hours of work or wages are reduced due to COVID-19:
- are deemed to be on job-protected IDEL leave;
- are not considered to be laid off; and,
- are not considered to be constructively dismissed under the ESA.
As previously reported, the Courts remain divided on whether Deemed IDEL protects employers from constructive dismissal claims under the common law, or if it only protects employers from complaints filed with the Ministry of Labour under the ESA.
In addition to extending Deemed IDEL, the government also extended the three days of paid leave for reasons related to COVID-19. The reasons can include illness, the requirement to self-isolate or treatment, which includes vaccination or recovery from side effects. The three paid days now apply between April 19, 2021, and July 31, 2022. Generally, employers must pay the employee the lesser of $200 per day and either the wages the employee would have earned or the minimum wage (if the employee receives performance-related wages). Subject to certain requirements, employers could apply to the WSIB to be reimbursed for payments, up to a maximum of $200 per day, per employee. The paid days are not in addition to paid sick leave that may otherwise apply.
d) Increase to Minimum Wage
Bill 43, Build Ontario Act (Budget Measures) 2021 received Royal Assent on December 9 of this year. Among other things, the Act amends the ESA to increase the general minimum wage to $15.00 per hour effective January 1, 2022. The Act also eliminates special minimum wage rates for liquor servers and increases the minimum wage rates for student (under the age of 18) to $14.10 per hour and for homeworkers to $16.50 per hour.
e) Other Legislation of Note from other Jurisdictions
- Bill 60, amended the Saskatchewan Employment Act, to add sexual harassment to the definition of harassment and to extend protections to independent/dependent contractors. The Bill also removes requirements to exclude supervisory employees from the same bargaining unit as those they supervise.
- Three jurisdictions introduced paid sick leave unrelated to COVID-19: Federal, British Columbia and Prince Edward Island.
- In addition to the introduction of the National Day for Truth and Reconciliation holiday for federally regulated employers on September 30, Prince Edward Island also added the new public holiday. British Columbia did not add holiday, but it did add Indigenous identity to the list of protected grounds in its Human Rights Code.
- On the accessibility front, the Federal Government published draft regulations with a tentative timeline for implementation. British Columbia and Newfoundland & Labrador introduced accessibility legislation. Manitoba, Saskatchewan and Ontario are seeking feedback on legislation and standards.
- Quebec introduced Bill 96 which, if enacted, will require additional employment documents to be written in French and expanding protections for employees who only speak French.