Amendment to the ESA – Frequently Asked Questions
This FAQ was created on January 30, 2022, and the information herein is subject to change with the implementation of the amendment and any regulations made under the legislation
Bill 27, Working for Workers Act, 2021, an amendment to the Employment Standards Act (hereinafter the “ESA”), received royal assent on December 2, 2021 and will be effective June 2, 2022. The two most significant changes to the ESA are the “right to disconnect” and the prohibition against non-competition clauses in employment agreements.
The “Right to Disconnect”
The new Part VII.0.1. of the ESA will include the “right to disconnect,” Pursuant to subsection 21.1.2(1) of the ESA, an employer that, on January 1 of any year, employs 25 or more employees, shall, before March 1 of that year, ensure it has a written policy in place for all employees with respect to disconnecting from work that includes the date the policy was prepared and the date any changes were made to the policy.
Subsection 21.1.2(2) requires an employer to provide a copy of same to each of their employees within 30 days of preparing the policy, or, if an existing written policy is changed, within 30 days of the changes being made. Where a new employee is hired, the employer shall give that employee a copy of the written policy within 30 days of the day the employee becomes an employee.
Frequently Asked Questions
I employ less than 25 employees. Do I need to have a right to disconnect policy in place?
If you employ less than 25 people as of January 1 of each year, you are not required for that calendar year to have a Right to Disconnect Policy in place.
Does “25 or more employees” include independent contractors?
Independent contractors are NOT included in the calculation of employees as it pertains to the Right to Disconnect Policy, as they are not employees within the meaning of the ESA.
Does “25 of more employees” include part-time employees?
Yes, if they are employed as of January 1st. Currently, there are no exemptions to the “right to disconnect” for any class of employees as defined by the Employment Standards Act, 2000.
I employ more than 25 people, but only seasonally. Are seasonal employees included?
If your seasonal employees are employees as of January 1st of any year, they are included.
What is the “right to disconnect”?
The term “disconnecting from work” is defined to mean not engaging in work-related communications, including emails, telephone calls, video calls or the sending or reviewing of other messages, so as to be free from the performance of work.
Does this mean change to the legislation mean that employment contracts need to be amended?
Employment contracts do not need to be amended.
What should the “right to disconnect” policy include?
A written policy must be in place, with respect to disconnecting from work that includes the date the policy was prepared and the date any changes were made to the policy. These are the only current guidelines for what the policy is to include.
It does not require the employer to give all employees an unrestricted right to disconnect outside of working hours; the employer is simply required to have a policy in place with respect to the right to disconnect.
Do employees have to sign this policy?
There is no requirement that your employees sign the Right to Disconnect Policy. You are required to provide a copy of the policy to each of your employees within 30 days of preparing the policy.
When does this policy need to be in place?
For 2022, your Right to Disconnect Policy must be in place by June 2, 2022. For all subsequent years, the Right to Disconnect Policy must be in place by March 1st
If you update your policy, you must provide an updated copy to each of your employees within 30 days of the changes being made. If you update the policy, you must include both the date the policy was created and the date it was amended in the policy.
If a new employee is hired, you must provide that employee a copy of the written policy within 30 days of the day the employee becomes an employee.
Prohibition on Non-Competition Clauses in Employment Contracts
The New Part XV.1 of the ESA will prohibit employers from entering into employment contracts or agreements with an employee that are, or that include, a non-compete agreement, with certain exceptions. Pursuant to section 67.2(1) of the Act, “no employer shall enter into an employment contract or other agreement with an employee that is, or that includes, a non-compete agreement.” If an employment agreement contains a non-compete agreement, the non-compete is void, pursuant to subsection 67.2(2). The Act defines a non-compete agreement at subsection 67.1 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.”
Frequently Asked Questions
Can Employment Agreements restrict an employees ability to compete during their employment?
Yes. The amendment does not prohibit the employer from including a valid non-competition clause in the Employment Agreement relating to competition during the employee’s course of employment.
Are there any exemptions to this prohibition against non-competition clauses?
There are two exceptions from the prohibition on non-competition clauses in employment contracts:
- Pursuant to subsection 67.2(3) of the ESA, if there is a sale of a business, or part of the business, and as part of the sale, the parties enter into an agreement prohibiting the seller from “engaging in any business, work, occupation, profession, project or other activity that is in competition with the purchaser’s business after the sale and, immediately following the sale, the seller becomes an employee of the purchaser,” the prohibition against non-compete agreements does not apply.
- The second exemption is if the employment agreement is between an employer and an employee who is an “executive,” as defined by the ESA. The ESA defines an “executive” at subsection 67.2(5) as follows:
“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.”
If the employee falls within this definition of an “executive” a valid non-competition clause will not be void as a result of this amendment to the legislation.
- Josh Valler and Shannon Dawson