Working for Workers Act, 2021 - Changes to Ontario's Employment Laws

In our previous blog post, A ban on non-compete clauses? It may be the new reality., we discussed some of the changes to Ontario's employment laws proposed by Bill 27, Working for Workers Act, 2021 ("Bill 27"). On December 2, 2021, Bill 27 was passed into law.

In this blog post, we outline some of the key amendments to Ontario's employment laws arising from Bill 27. Please note, however, there are further changes not fully covered by this blog post. For more information on how Bill 27 may impact your workplace, please reach out to a member of the Lee Workplace Law team.

1. Amendments to the Ontario Employment Standards Act (the "ESA")

Bill 27 has made a number of significant amendments to Ontario's employment standards legislation, the ESA.

(a) Prohibition on Non-Compete Agreements

Retroactive to October 25, 2021, the ESA now prohibits an employer from entering into an employment contract that is or includes a non-compete agreement. A "non-compete agreement" is defined to mean "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." Any non-compete agreement that is entered into will be deemed void.

The ESA provides for only two exceptions to this general prohibition:

  1. Sale of business - This only applies in the context of a sale of a business. In such a case, the seller and purchaser may enter into an agreement that limits the seller's ability to compete immediately following the sale if the seller becomes an employee of the purchaser.
  2. Executives - Employers may enter into a non-compete agreement with an executive employee. Executive employee is defined in the ESA 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".

It is yet unclear whether these provisions will result in all non-compete agreements being void or only result in non-compete agreements entered into on or after October 25, 2021 being void. Given the liberal interpretation typically applied to the ESA, it seems likely that all non-compete agreements will now be void regardless of when they were entered into, unless an exception applies. However, we will need to wait for judicial confirmation of that.

(b) Right to Disconnect Policy

The ESA has also been amended to require employers with more than 25 employees to have a written policy in place for all employees with respect to disconnecting from work. "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."

Employers have until June 2, 2022 to prepare this policy. The policy must then be circulated with existing employees within 30 days. New hires must be provided the policy within 30 days of being hired.

Currently, the Ontario government has not provided guidance as to what the right to disconnect policy must include, but this may be prescribed at a later date. However, we would expect that the policy at a minimum should indicate the time and circumstances in which employees will be "free from the performance of work".

Employers are encouraged to stay tuned for further governmental guidance on what their right to disconnect policies must include.

(c) Licensing of Temporary Help Agencies and Recruiters

Bill 27 also amends the ESA to introduce a licensing regime for both temporary help agencies and recruiters. Temporary help agencies and recruiters are now required to apply to the Director of Employment Standards for a licence to provide their services. It is prohibited for any person to act as a recruiter or temporary help agency without a licence. It is also prohibited for any employer to knowingly engage the services of a recruiter or temporary help agency that is not licensed. A public record of licensed temporary help agencies and recruiters will be published on the website of the Ontario government.

The are also several other new ESA provisions which apply to recruiters and temporary help agencies, including record keeping requirements and a prohibition on reprisal by recruiters, amongst others.

2. Amendments to other employment legislation

The ESA was not the only piece of legislation affected by the passing of Bill 27. Bill 27 also resulted in amendments to the following statutes:


Bill 27 introduced a number of significant amendments to Ontario's employment laws. It remains to be seen the full impact of all the changes, but employers and employee alike would do well to familiarize themselves with the new provisions that may impact their workplace. Of note, employers and employee should keep an eye out for non-compete clauses that may run afoul of the new prohibition. Employers with more than 25 employees should also begin turning their minds to preparing their required right to disconnect policy.

Lee Workplace Law would be happy to answer any questions you have about the impacts of Bill 27.