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Oct 28, 2021

Keeping Up With the Changes: A Guide to Recent Legislation

By Lorenzo Lisi, Alex Kagan and Jessica Schissler

There has been a dizzying pace to the introduction of recent legislation. As provincial and federal legislators introduce measures which look beyond the worst impacts of the pandemic, the changes are significant. In addition, the Ford government in Ontario has introduced targeted legislation which will impact Ontario workplaces specifically and address not only work/life balance, but what can be included in an employment agreement. We’ve summarized these changes below.

An Emphasis on Hardest Hit Sectors

On October 23, 2021, the federal government officially ended the Canada Emergency Rent Subsidy and the Canada Emergency Wage Subsidy. The Canada Recovery Hiring Program was extended.

Despite shutting down these programs, the government introduced (a) the Tourism and Hospitality Recovery Program (the “Tourism Program”) and (b) the Hardest Hit Recovery Program (the “Hardest Hit Program”). The federal government also announced an extension of the Canada Recovery Hiring Program.

As the name suggests, the Tourism Program is focused on businesses operating in the tourism and hospitality sector, such as hotels, restaurants, bars, festivals, etc. This sector has widely been considered a ‘hard hit sector’ throughout the pandemic due to repeated closures, reopenings, international travel restrictions and ongoing capacity limitations. Conversely, the Hardest Hit Program is not a sector-specific program, rather it applies to any hard-hit business outside of the tourism and hospitality sector.

The eligibility thresholds for both programs appear to be quite high. The Tourism and Hospitality Recovery Program will require a business to demonstrate: (i) an average monthly revenue reduction of at least 40 percent over the first 13 qualifying periods for the Canada Emergency Wage Subsidy (12-month revenue decline); and (ii) a current-month revenue loss of at least 40 percent. The Hardest Hit Program will require a business to demonstrate: (i) an average monthly revenue reduction of at least 50 percent over the first 13 qualifying periods for the Canada Emergency Wage Subsidy (12-month revenue decline); and (ii) a current-month revenue loss of at least 50 percent.

Provincial Efforts to Return to Pre-Pandemic Life

On October 22, 2021, the Ontario government announced A Plan to Safely Reopen Ontario and Manage COVID-19 for the Long-Term (the “Plan”). An infographic describing the Plan’s phases can be accessed here. 

The intention is to lift all COVID-19 related public health and workplace safety measures over the next six months, including those regarding mandatory face coverings and screening for vaccination status. To be clear, although the Plan provides dates and milestones, the government has stated that these are contingent on the “absence of concerning trends.”

The first milestone regarding capacity limits and the ‘two-metre rule’ came into effect almost immediately on October 25, 2021. These restrictions will be lifted in several settings where proof of vaccination is required. It is important to note that the Ontario government has not provided a blanket lifting across all establishments, but highly specific rules pertaining to different groups of businesses/establishments apply. For example, the two-metre physical distancing rule has been lifted for restaurants, bars and other food or drink establishments where proof of vaccination is legislatively required. COVID-19-imposed capacity limitations and the two-metre physical distancing requirement have been lifted for a host of establishments, including facilities used for indoor or outdoor sports and recreational fitness activities, casinos, bingo halls, etc. where proof of vaccination is also legislatively required. These establishments can return to pre-pandemic capacity levels.

The Ontario government will also permit other settings, such as hair salons, indoor areas of museums, galleries, etc., to lift the two-metre physical distancing requirement if proof of vaccination is required through a daily “election”. In other words, in the absence of the daily “election” and screening for vaccination status, the standard rule requiring distancing of at least two meters still applies. At this stage, this change does not apply to settings in which people receive medical care, food from grocery stores and/or medical supplies.

Another major milestone, if the Plan is not interrupted by concerning trends, would be lifting the vaccination status requirement for restaurants, bars, casinos, etc. on January 17, 2022. By March 28, 2022, the Ontario government intends to lift proof of vaccination for all settings, including meeting and event spaces, sporting events, concerts and theatres, among others.

Despite these changes, business owners are still obligated to maintain safe premises for employees and the public. The government enacted various regulations to establish statutory minimums with respect to safety and COVID-19. And while lifting these minimums over time may be welcomed by the public, business owners still need to carefully consider the safety of the settings they control, including against the threat of COVID-19, and implement all necessary safety protocols accordingly. These protocols should only be relaxed when it is objectively safe to do so.

Introduction of Ontario’s Working for Workers Act, 2021

On October 25, 2021, the Ontario government introduced Bill 27, Working for Workers Act, 2021. The omnibus bill is designed to improve the Ontario workforce through a series of wide-ranging legislative amendments. Bill 27 is on its first reading. It will be fully examined at the remaining stages of the legislative process and further amendments are to be expected.

Requirement for Written ‘Right to Disconnect’ Policies

If passed, Bill 27 would amend the Employment Standards Act, 2000 (the “ESA) to include a ‘right to disconnect’ portion. This amendment would require employers with 25 employees or more to develop written policies that provide employees with the legal right to disconnect from work. It remains to be seen if the requirement of 25 employees or more pertains solely to Ontario employees, or is more expansive in scope, or if future amendments to Bill 27 will allow for employer exemptions to a disconnecting policy. We will provide a more comprehensive analysis of this legislation if and when passed, but at first blush, there would appear to be real issues with respect to compliance and enforcement.

Unenforceability of Non-Compete Agreements

If passed, Bill 27 would amend the ESA to include a provision that precludes employers from entering into an employment contract, or any other agreement with an employee, that either is or includes a non-compete agreement or clause. If any employer contravenes this provision, the non-compete is void, but the remainder of the employment agreement is not considered void, assuming it is in compliance with other applicable legislation.

There is currently no expressed statutory exception for paying a former employee not to compete through an enhanced severance package. However, Bill 27 does provide an exemption in the event that there is a sale of a business, or part of a business, and the purchaser and seller have entered into an agreement that prohibits the seller from engaging in any business, work, project, etc. that is in competition with the purchaser’s business after the sale and, immediately following the sale, the seller becomes an employee of the purchaser. In this case, a non-compete agreement or clause will not be automatically void.

Again, we will provide a more complete review if the Bill passes. Given that non-competition provisions in employment agreements have been difficult to enforce before the courts, the legislation may have a number of unintended consequences. Stay tuned.

Update on ROE Coding for Employers

Employment and Social Development Canada recently released additional information to assist employers in issuing records of employment (“ROEs”) for employees during the COVID-19 pandemic. In most cases, if an employee loses or quits their job due to non-compliance with a mandatory vaccination policy, they will not be eligible for regular EI benefits.

When an employee does not report to work because they refuse to comply with the mandatory COVID-19 vaccination policy, an employer is to use code E (quit) or code N (leave of absence) on that employee’s ROE. When an employee is suspended or terminated for non-compliance with a mandatory vaccination policy, the employer is to use code M (dismissal). If any of these codes are used, the employer may be contacted to clarify the circumstances surrounding the employee.

This may signal that the federal government is prepared to take a harder stand on providing benefits to those individuals who are terminated or are placed on a leave of absence as a result of their refusal to vaccinate. Again, time will tell.

For more information on select topics discussed above, be sure to register for our Workplace Law Education Session, which takes place on November 4, 2021. Details and registration information can be found here. 

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