Ministry Updates ESA Guide on Disconnecting from Work Policies and Non-Compete Agreements


Ministry Updates ESA Guide on Disconnecting from Work Policies and Non-Compete Agreements

Date: February 22, 2022

On February 18, 2022, the Ontario Ministry of Labour, Training and Skills Development (Ministry) updated its online guide to the Employment Standards Act (Guide) to include chapters on written policy on disconnecting from work and non-compete agreements.

The chapters provide guidance on recent Employment Standards Act, 2000 (ESA) amendments that require employers with 25 or more employees to have a written policy on disconnecting from work, and that prohibit employers from entering into non-compete agreements with employees (subject to limited exceptions). These amendments were included in Bill 27, Working for Workers Act, 2021. (For more information about Bill 27, please see our FTR Now of October 26, 2021, Ontario Proposes Significant Changes to ESA and Other Employment-Related Legislation, as well as our FTR Now of December 1, 2021, Ontario Passes Bill 27, Working for Workers Act, As Amended at Committee.)

In this FTR Now, we provide an overview of the new information contained in the Guide, and how we can assist you in navigating these new requirements.

Written Policy on Disconnecting from Work

Employers with 25 or more employees as of January 1, 2022 have until June 2, 2022 to have a written policy on disconnecting from work (Policy) in place. Beginning in 2023, employers who meet the 25 or more employee threshold on January 1 of each year must have a Policy in place before March 1 of that year.

The ESA defines “disconnecting from work” 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.” The Guide states that this definition is not exhaustive and other types of work-related communications could also fall under it.

The requirement to have a Policy applies to all employees and employers covered by the ESA except the Crown, a Crown agency or an authority, board, commission or corporation whose members are all appointed by the Crown and their employees.

Among other things, the Guide:

  • sets out which “employees to include in the count” when determining if the 25-employee threshold is met, which includes employees at multiple locations or those of related employers
  • confirms that assignment employees of temporary help agencies are employees of the agency and are included in the count to determine if the temporary help agency has met the 25-employee threshold
  • clarifies that determining whether an employer has 25 or more employees as of January 1 is a point-in-time assessment, meaning that if the employer has fewer than 25 employees as of January 1 then the ESA does not require it to have a Policy in place for that year, even if that number increases to 25 or more after January 1, but conversely, if an employer has 25 or more employees as of January 1 and that number decreases later within the same year, the requirement to have a Policy in place still exists throughout the remainder of the calendar year
  • confirms that the “obligation to have a Policy does not require an employer to create a new right for employees to disconnect from work and be free from the obligation to engage in work-related communications in its policies” but that employee rights under the ESA to not perform work are established through other ESA rules (e.g. hours of work and eating periods, vacation with pay, public holidays)
  • comments on the fact that a Policy may afford employees a greater right or benefit than under the ESA, and may be enforceable along with other ESA rules
  • clarifies that the Policy applies to all employees in Ontario that are captured by the ESA, including management, executives and shareholders if they are employees under the ESA, but that the employer can have a different Policy (or different sections of the same Policy) for different groups of employees
  • clarifies that the Policy may be a stand-alone document or part of a comprehensive workplace policy document
  • contains details on providing notice of the Policy to employees, and states that employers do not need to provide the Policy annually if the Policy has not changed from the previous year (new hires must receive a copy of the Policy within 30 days of hire)
  • confirms that employers must retain a copy of every Policy as required by the ESA for three years after the Policy is no longer in effect.

The Guide provides details on what the Policy might address, which may include:

  • the employer’s expectations, if any, of employees to read or reply to work-related emails or answer work-related phone calls after their shift is over (e.g. depending on the time the communication is sent, its subject matter or who is contacting the employee)
  • requirements for employees turning on out-of-office notifications and/or changing their voicemail messages when they are not scheduled to work to communicate that they will not be responding until the next scheduled work day.

Hicks Morley’s lawyers are uniquely positioned to help craft a Policy with your organization’s workforce and operations in mind. Should your organization require assistance, please contact your regular Hicks Morley lawyer.

Non-compete Agreements

Effective October 25, 2021, employers are prohibited from entering into employment contracts or other agreements with an employee that includes a non-compete agreement. The Guide clarifies that the ESA does not prohibit non-compete agreements that were entered into before October 25, 2021. Instead, such agreements remain subject to the common law.

Among other things, the Guide sets out:

  • examples of agreements that may be considered non-compete agreements
  • the exceptions to the prohibition on non-compete agreements (e.g. for individuals who meet the definition of an “executive” or in certain sale of business circumstances)
  • an overview of non-solicit and non-disclosure agreements (which the ESA does not prohibit)
  • information on enforcement.

Going forward, employers should ensure that their employment contracts or other agreements do not contain non-compete agreements (or language that could be interpreted as such) unless the employee falls within one of the limited exceptions. Contracts containing non-compete agreements entered into on or after October 25, 2021 may need to be amended, and employers should consult with legal counsel on how to do that.

For information about how these changes may impact your organization or for help in responding to them, please contact your regular Hicks Morley lawyer.

The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©