New Legislation Affecting Employee Contracts

by Scalex on December 9, 2021

On November 30, 2021, the Working for Workers Act became legislation in the Province of Ontario. The purpose of this new act is remove possible barriers to employment, and make Ontario the best place for people to work, live and raise a family. To that end, there are two provisions that are raising a lot of questions right now. The first address non-competition clauses and/or agreements and the second has to do with the right to disconnect.

ScaleX’s HR Consulting leader, Jessica Lin in a discussion with Matthew Vella, a partner at Filion Wakley Thorup Angeletti LLP, asked about this legislation. Mr. Vella advised that the new non-compete provisions would apply to new contracts but that it would be prudent to update existing contracts to bring them in-line with this new legislation to ensure that they are found to be valid if challenged in court. There are two very specific exemptions to this new rule.

The first exemption occurs if you are selling a business. In that case, as you’re selling the company or business as a whole, you can be subject to a non-competition agreement post-sale. The second exemption applies to those persons in a C-Suite role within a company. A person occupying the role of Chief Executive Officer, Chief Sales Officer, etc. can be bound to a non-competition agreement as well.

In terms of the right to disconnect provisions, Mr. Vella stated that this would apply to employers with 25 or more employees. This new provision aims to help employees find better balance between work and life by formalizing a right to disconnect from their job at the end of the workday.

For more details and thoughts on what changes your business may need to make, please watch Jessica’ s interview with Matthew Vella.

Topics: Recruitment, Human resources, Legislation