Bill 27, Working for Workers Act: New Amendments Carve Out An Exception to Non-Competition Agreements for Executives
On October 27, 2021, we reported on our blog about the Government of Ontario’s Bill 27, Working for Workers Act, (“Bill 27”), which proposes a number of legislative amendments to the Employment Standards Act, 2000 and other employment related pieces of legislation, including requiring certain employers to create a “right to disconnect” policy, prohibiting the use of non-competition agreements in employment contracts and creating additional licensing requirements for temporary help agencies.
After Second Reading, Bill 27 was referred to the Standing Committee on Social Policy and a number of important amendments have been proposed, including the following:
Prohibition on Non-Competes Not Applicable to Executives
- The proposed amendments carve out an exception to the prohibition on non-competition agreements for executives. An “executive” is proposed to be 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 any other chief executive position.”
- The proposed term “sale” in the sale of a business or a part of a business exception to the prohibition on non-competition agreements has been clarified to also include a “lease”.
Recruiters Prohibited from Charging Fees to Foreign Nationals
- The proposed amendments add a new prohibition that prohibits a recruiter or an employer from a charging a foreign national a fee in connection with their recruitment or employment.
- Applicants applying for a license to act as a recruiter would need to provide a statement that they are aware of this prohibition.
- An Employment Standards Officer or the Director of Employment Standards may issue fines for a contravention of this prohibition. The Director of Employment Standards may also refuse to issue a license to a recruiter if the recruiter has been found in contravention of the prohibition.
Implications for Employers
Employers will be relieved to know that the non-competition agreements for their C-suite employees will not be affected by Bill 27, if the legislation passes in its current form. There continue, however, to be a number of outstanding questions with respect to the “right to disconnect” provisions of Bill 27, including what will be required to be included in a “right to disconnect” policy or whether certain employees may be exempt from the requirements.
As Bill 27 approaches the final stages of the legislative process and proceeds to Third Reading, it is possible that these details will be addressed at a later date by regulation. Our team continues to monitor the status of Bill 27 and will post updates as they become available.
If you have any questions regarding the impact of these proposed changes on your workplace, please do not hesitate to contact a member of our Labour & Employment Law Group.