Workplace Law Year in Review (and Looking Ahead to 2022)
2021 was a dizzying year for employers. The ever-changing nature of the pandemic required workplaces to continuously adapt to various government-imposed rules and regulations. In light of the surge of the Omicron variant, it remains to be seen what the next few months will look like. Regardless of whether further restrictions or eventual easements are on the horizon, it appears that Ontario workplaces have to patiently brace themselves for a more extended period of change.
The Aird & Berlis Workplace Law Group advised employers every step of the way throughout the pandemic. To ensure a smooth transition into 2022, we have summarized a host of recent developments to keep a collective finger on the pulse of workplace law in Ontario and Canada.
For many employers, late 2021 involved the introduction of workplace vaccination policies in an effort to bring employees back to physical office spaces in a safe manner. The rapid rollout of booster shots may lead to a change in the accepted Health Canada definition of “fully vaccinated,” which will require necessary amendments to workplace vaccination policies and procedures. We encourage our clients to make these changes as early as possible, should it become necessary, in order to give as much notice as possible to employees.
Mandatory Right to Disconnect Policies
In the context of increased discussions surrounding employee burnout exasperated by remote work amid the COVID-19 pandemic, on December 2, 2021, Bill 27, Working for Workers’ Act (the “Act”) officially became law in Ontario.
The Act requires an employer with 25 or more employees (as at January 1 of any given year) to ensure that it has a written policy in place for all employees with respect to disconnecting from work by March 1 of that year. “Disconnecting from work” is defined as not engaging in a range of work-related communications so as to be free from the performance of work. The Act is otherwise silent on the content of the mandatory policy.
Employers have a grace period until June 2, 2022, to determine whether they employ 25 employees or more as of January 1, 2022, and prepare and implement a written policy. Notably, any implementation or change to such a policy must come with 30 days’ notice to employees.
In our view, the grace period ought to be used to gather information on office culture and how a right to disconnect policy could operate. For example, employers should examine which hours their employees are typically “on” and most productive, how much of their workforce is currently working remotely, use of technology by employees, etc.
We expect further updates in the new year, including a possible list of exempted workplaces and category of employees. For example, many have questioned whether employers exempted from other provisions of the Employment Standards Act, 2000 (“ESA”) (e.g. legal professionals, engineers, construction businesses, etc.) will also be exempted from the right to disconnect. Currently, there are no such exemptions, but we are closely monitoring such developments.
Prohibition on Non-Competition Agreements
As we previously advised, the Act (as defined above) includes a prohibition on non-competition clauses and precludes employers from having employees enter into contracts that include a non-competition clause (as well as standalone non-competition agreements). While the presence of such a clause will not unilaterally void the entire the agreement, the clause itself will be considered void.
Importantly, the Act provides two exceptions. Firstly, if in the event of a sale of a business (or part of a business), the purchaser and seller enter into an agreement that prohibits the seller from engaging in any business that is in competition with the purchaser’s after the sale, and the seller becomes the employee of the purchaser immediately following the sale, a non-competition clauses/agreement is permissible.
Secondly, the Act carves out a limited exception for executive employees, 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 holds any other chief executive position.” While there is no specific guidance yet on the duties, an employee must be properly classified as an executive for the exemption. Employers should avoid using executive titles without corresponding executive-level duties to fall within the exemption, as that is likely to come under scrutiny.
Non-competition agreements entered into prior to October 25, 2021, will not automatically be deemed void and unenforceable under the Act. However, given the existing common law presumption that non-competition provisions are generally unenforceable except in very limited circumstances, “old” non-competition clauses may be subject to increased scrutiny by Ontario courts in light of the Act.
In light of the development, for non-executive employees, employers should remove non-competition clauses from any template contracts on a go-forward basis.
Infectious Disease Emergency Leave Extended to July 31, 2022
On December 7, 2021, the Government of Ontario once again extended the period that the infectious disease emergency leave (“IDEL”) will apply pursuant to the Ontario Regulation 228/20: Infectious Disease Emergency Leave. While previously scheduled to expire on January 1, 2022, IDEL is now extended to July 31, 2022.
Our first article on IDEL provided a comprehensive overview. Since then, the expiry date has been extended several times. Put simply, under the IDEL Regulation, non-unionized employees whose wages or hours are reduced or eliminated due to COVID-19 are not considered to have been statutorily laid off or constructively dismissed under the ESA. Instead, such employees are deemed to be on job-protected leave. Employers should keep in mind that the Regulation has not conclusively amended the common law of constructive dismissal and will only apply in the presence of a contractual provision entitling the employer to lay off an employee temporarily.
We continue to encourage our clients to exercise caution in making their decisions concerning temporary layoffs as we continue to follow these developments closely.
Expansion of Local Lockdown Program for Eligible Businesses and Organizations
On December 22, 2021, the federal government announced its intention to temporarily expand access to the Local Lockdown Program (the “Program”). The proposed expansion will be in effect for qualifying periods from December 19, 2021, to February 12, 2022. During that time, it is anticipated that public health authorities will implement restrictions to combat the spread of the Omicron variant.
The Program provides wage and rent support to businesses and organizations through the Tourism and Hospitality Recovery Program, and is available to eligible organizations regardless of sector. Originally, eligibility was limited to organizations or businesses affected by a qualifying public health restriction and had a claim-period revenue drop of at least 40%. However, the proposed eligibility threshold will now be expanded to include employers subject to capacity-limiting restrictions of 50% or more and have experienced a current-month revenue loss of at least 25%. Eligible employers will receive wage and rent subsidies from 25% to a maximum of 75%, depending on their degree of revenue loss.
Eligible employers who continue to see their businesses impacted by the pandemic should aggressively seek all available supports. Given our experience with the pandemic, it is likely that further changes will be introduced.
2021 has been a challenging year. What has been both encouraging and promising is that our employer clients have continued to roll with the punches and, with the assistance of practical and consistent legal advice, adapt on an ongoing basis.
This supports our long-standing view that employers almost exclusively wish to do the right thing, particularly when provided with appropriate guidance and support. Our group has been honoured and humbled to assist and provide guidance throughout these uncertain times. We deeply appreciate and value the loyalty, strength and commitment of our clients and community, and we look forward to continuing to work together.
We wish everyone a safe, productive and happy New Year. Here is to a less complicated 2022!