Ontario Passes Bill 27, Working for Workers Act, As Amended at Committee


Ontario Passes Bill 27, Working for Workers Act, As Amended at Committee

Date: December 1, 2021

On November 30, 2021, the Ontario government passed Bill 27, Working for Workers Act, 2021.

The Bill will amend a number of statutes, including the Employment Standards Act, 2000 (ESA), the Occupational Health and Safety Act and the Workplace Safety and Insurance Act, 1997. We reviewed Bill 27 in detail in our FTR Now of October 26, 2021, Ontario Proposes Significant Changes to ESA and Other Employment-Related Legislation.

In this FTR Now, we report on amendments made to Bill 27 by the Standing Committee on Social Policy (Committee), as passed by the Legislative Assembly. The amendments relate to the ESA and the Employment Protection for Foreign Nationals Act, 2009.

Prohibition of Non-Compete Provision in Employment and Other Agreements

The new prohibition in the ESA against non-compete agreements between an employer and an employee was amended at Committee to provide an exception where the non-compete agreement in the employment contract or other agreement is with respect to an “executive.”

An executive is 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.”

This amendment narrows the scope of the prohibition against non-compete agreements. Employment contracts that have non-compete agreements are often with employees who fall within the ESA’s newly created “executive” definition, although non-compete provisions can also be found in employment contracts with other types of employees. If an employer wishes to enter into a non-compete agreement with an employee, it will be important to review whether the employee meets the ESA’s definition of “executive,” in addition to considering the requirements of the common law related to the enforceability of non-compete agreements more generally.

At the time of writing, the Bill is awaiting Royal Assent. When that is received, the prohibition against non-compete agreements is deemed in force effective October 25, 2021.

Changes Related to Foreign Nationals and Licensing Requirements for Recruiters

The Employment Protection for Foreign Nationals Act, 2009 (Act) has been amended to include a prohibition against a recruiter or employer, in connection with the recruitment or employment of a foreign national, knowingly using the services of a recruiter who has charged a fee to a foreign national in contravention of subsection 7(1) of the Act (which prohibits recruiters from charging fees to foreign nationals).

The ESA has also been amended to include changes to the recruiter licensing requirements, which now require certain statements to be provided regarding foreign nationals and related obligations under the Act. These include a statement that the recruiter is aware of the prohibition against charging fees to foreign nationals under the Act, as well as a statement that the applicant is aware the Director of Employment Standards shall refuse to issue a licence or revoke or suspend a licence if the applicant has charged fees to a foreign national in contravention of the Act. The applicant must also confirm that it has not charged such fees in contravention of the Act.

If the applicant for the licence engages or uses the service of any other person who is not its employee to recruit foreign nationals, it must also confirm certain information in its application, which includes information about the individual and business engaged and statements regarding the applicant’s awareness of the person’s business practices with respect to obligations under the Act.

These changes will come into force at a future date upon proclamation.

For more information about Bill 27 and how it will impact your workplace, please contact your regular Hicks Morley lawyer.

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