Ontario's Working for Workers Five Act; It May be Time to Review Your Employment Policies

Make it a Priority to Review and Update Your Employment Agreements, Policies and Handbooks

Employment law has been evolving rapidly over the past few years making it critical for employers to review and update their employment agreements and employment policies and handbooks in order to keep up to date with new legislation.

There have been a number of legislative changes which generally favour employees including under the four Working for Workers Acts passed by the Ontario government since 2021 that ban non-competition agreements in certain circumstances, and require the implementation of new employment policies by employers with more than 25 employees and transparency in job postings, all as described below.  There are further changes proposed by the Ontario government under the recently announced Working for Workers Five Act, 2024.

Recent Legislative Changes Impacting Ontario Employers and Employees

The first four Working for Workers Acts which have been passed by the Ontario government since 2021 have included the following changes aimed at protecting workers and newcomers to Ontario:

• Ban on new Non-Compete Clauses being entered into by employees on or after October 21, 2021 subject to exemptions for President and C-Suite executives and a very limited sale of business exception.  An illegal non-competition agreement will be void and there is a risk that the entire contract in which the non-compete is contained may be void. Existing non-compete covenants are not impacted but they must still be otherwise enforceable.  Attached is a link to our two prior client communications on this legislative change: December 3, 2021 Update and October 27, 2021 Update.
• Requiring new written HR policies to be implemented by employers with 25 or more employees regarding the Right to Disconnect from Work (by June 2022) and Electronic Monitoring of Employees (by October 2022).
• Transparency in Job Postings under Working for Workers Four  Act, 2024  (to come into effect on a day to be determined by the Lieutenant Governor) (1) require job postings to include expected salary ranges and to disclose if artificial intelligence is used to assess, screen or select job applicants, (2) prohibit Canadian job experience as a requirement in job postings, and (3) provide that employers must have an employee’s written consent to have vacation pay paid in a different manner than a lump sum before vacation is taken.
• Launching consultations on restricting the use of non-disclosure agreements in the settlement of workplace sexual harassment, misconduct or violence cases, while protecting the rights of victims.
• Launching consultations on a new job-protected leave of 26 weeks to help workers dealing with a critical illness such as cancer.

The Ontario government announced on May 3, 2024 that it is proposing several new measures in the Working for Workers Five Act, 2024 including (1)  amendments to the ESA to double the maximum fine for an individual who contravenes the ESA from $50,000 to $100,000 and to increase fines from $1,000 to $5,000 for a repeat offender who contravenes the same provision of the ESA three or more times, (2) prohibiting employers from requiring a medical note from employees taking statutory sick leave, (3) disclosure in a publicly advertised job posting of whether or not a job vacancy exists and certain additional information as may be prescribed, (4) requiring employers to respond to a job applicant the employer has interviewed for a publicly posted job, and (5) additional changes to the Occupational Health and Safety Act including updating the definition of “workplace sexual harassment” and “workplace harassment” to cover virtual interactions.  These amendments (if passed) will come into force when the Working for Workers Five Act, 2024 receives Royal Assent.

The Ontario government has also announced an increase in its minimum wage from $16.55 to $17.20 per hour effective on October 1, 2024.  Following this change, Ontario will have the second highest minimum wage in Canada.

Conclusion

Ontario employers should consider reviewing and amending their current employment agreements and employment policies or handbooks to ensure compliance with the above-described legislative changes.

For further information concerning these developments, please contact any member of our Employment Law Group.