Working for Workers: Bills 27 and 88 in the Commercial Context
By: Daniel Lawlor

This article covers the grey area of employment and commercial law, but we felt it appropriate to provide some guidance for the battery of organizational changes stemming from two recent legislative instruments.  

Bill 27
Bill 27, also known as the Working for Workers Act, 2021, is already in force.  It received royal assent on December 2, 2021 and brought about two pertinent changes: the so-called “right to disconnect”, and the prohibition on non-compete agreements.  

Disconnecting from Work
Employers with more than 25 employees are now under an obligation to have a written “Disconnecting From Work” policy in effect as of June 2, 2022.  Employers must determine as of January 1 each year whether they have 25 or more employees, and if so, they must enact and distribute to all employees a copy of their policy by March 1 that same year.  Changes to the number of employees are irrelevant until the following January 1st.  Any person that meets the definition of an “employee” under the Employment Standards Act is to be counted, including (among others) casual and part-time employees and those on leave or laid off. All employees must be given a copy of the policy within 30 days if the policy is amended during its effective period, and new hires must be given a copy within 30 days of being hired.

The ESA definition states:
““disconnecting from work” means 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.”
There is, however, no defined content that must be included.  The legislation thus does not create any distinct right for employees, but rather just the obligation for employers who meet the threshold to  have a policy of some kind in place.  The Ontario government’s “Guide to the Employment Standards Act” specifies this clearly.  The stated reason for this is that employees are already awarded other rights under the ESA (e.g. overtime compensation, holiday pay).  The policy must apply to all employees, including those that might traditionally be exempt from other hours-of-work or overtime requirements, but it is possible for the policy to have different sub-groupings to apply to different classes of employees.  It does not need to be a standalone document and can instead be worked into employee handbooks or combined with other policies.

This is an admittedly confusing circumstance to handle, and time will tell whether the legislative goals are met.  Meanwhile, employers should be cautious about drafting policies and are advised to avoid inadvertently giving rights or privileges that they do not intend to confer on staff.  In fact, so long as an employer’s disconnecting from work policy does not confer a “greater benefit” within the meaning of the ESA, the policy is not legally enforceable – though it is still required to exist.  The amendment leaves the door open for future regulations that could prescribe the content of such a policy.

Business lawyers may need to provide guidance to clients about this, and transactional lawyers should verify compliance with the ESA amendments when appropriate.  One key aspect for now seems to be to ensure that policies are not accidentally drafted to provide actual rights or benefits, and to identify and amend offending language.  Suggestions for what to put in such policies include things like company expectations for how and when to respond to certain types of communications; categorizing employees into groups where appropriate; stating the company’s standard hours; and providing details on how to inquire or file complaints about the policy.
Non-Compete Agreements

In a different heading under the same bill, new rules were introduced that effectively ban non-compete agreements between employees and employers.  This addresses the thorny nature of such agreements, which have long been difficult to enforce.  Agreements entered into at any time, whether before, during, or after the employment relationship concludes, will be of no force and effect.  Employees and employers cannot contract out of this provision.  
There are limited exceptions. On the sale (or lease) of a business that is a sole proprietorship or a partnership, it is fairly common for the former owner to be hired by the new one.  Thus, a seller who is an individual or a partner in a partnership may enter into a non-compete agreement with the purchaser if the individual also becomes an employee of the purchaser following the sale.  There is also an exception for employees that are “executives”, as defined in the ESA, which in short includes anyone with “president” or “chief” in their job title.   Pre-existing non-compete agreements that were in place prior to October 25, 2021, may still be valid, but are subject to the common law rules.
Business clients who may be affected should review existing employment contracts to remove any offending language.  It would also be prudent to consider the classification of roles and job titles for any executives intended to be covered by such agreements.

Bill 88
Bill 88, also known as the Working for Workers Act, 2022, received royal assent on April 11, 2022.  Among other things, it amended the ESA to clarify certain definitions pertaining to business and IT consultants and added an employer obligation to have a digital monitoring policy.  Both of these aspects will come into force on January 1, 2023.   The bill also introduced the Digital Platform Workers’ Rights Act, 2022, which has yet to take effect as it requires further proclamation.

Consultant Exemptions
This aspect introduces the concept of an IT or business consultant professional who provides services as a sole proprietorship or through a corporation where the consultant is a director or shareholder who is party to a unanimous shareholder agreement in respect of that corporation. “Business Consultant” is broad and “means an individual who provides advice or services to a business organization in respect of its performance, including advice or services in respect of the operations, profitability, management, structure, processes, finances, accounting, procurements, human resources, environmental impacts, marketing, risk management, compliance or strategy of the business or organization.”  “Information Technology Consultant” “means an individual who provides advice or services to a business or organization in respect of its information technology systems, including advice about or services in respect of planning, designing, analyzing, documenting, configuring, developing, testing and installing the business’s or organization’s information technology systems.”

There must be an agreement in place whereby the consultant is entitled to a rate of pay of at least $60 an hour exclusive of bonuses or commissions and expenses, and the consultant must actually be paid that amount.  If these conditions are met, the individual is exempt from the requirements of the ESA.  

Lawyers should be mindful of these requirements when advising businesses seeking to hire consultants, or clients that provide consulting services, when reviewing or drafting commercial agreements.  This change goes into effect January 1, 2023, and organizations and consultants should be prepared to confirm that the requisite conditions are met to satisfy the intention of the overall arrangement.

2. Digital Monitoring Policy
This requirement presents similarly to the “Disconnecting From Work” policy discussion above in that the main obligation for employers is to ensure that they have a policy in place that they can point to if they have 25 employees or more on January 1 of any given year.  For employers where that was true for calendar year 2022, the policy must be in place as of October 11, 2022.  There appears to be little recourse in the case of employers breaching their own policies, presumably unless the policy gave workers some greater right than provided under the ESA.  There is an explicit acknowledgment that the requirement does not limit the uses to which the employer can put the data resulting from such monitoring.  It does not create any explicit new privacy rights, or a right not to be monitored. However, if an employer does digitally monitor its employees, the policy must set out the manner in which it monitors them, as well as the ways in which the monitored data is used.  All employees must receive the policy within 30 days of the date the employer is required to have it, or within 30 days of being hired.  

The advice here echoes the concerns from the “Disconnecting” policies.  Organizations will need to review and consider the extent to which they actually monitor employees, and how to present this information.  Care should be taken not to provide more rights than intended.

3. Digital Platform Workers’ Rights Act, 2022
Part of Bill 88 is the introduction of this new act, which does not yet have a date for coming into force. A full review of the act is beyond the scope of this article, but there are a few key points to note.  The purpose of the legislation is to offer protections to gig workers that use digital platforms such as Uber or DoorDash to provide for-fee services.  While the door is open for additional types of “digital platform work” to be prescribed by regulations, it currently means “the provision of for payment ride share, delivery, courier or other prescribed services to workers who are offered work assignments by an operator through the use of a digital platform,” and applies if the work is done in Ontario. 
The act parallels the ESA in forcing “operators” (akin to ESA “employers”) to assume certain obligations in relation to “workers” (akin to ESA “employees”).  This means that whether or not a so-called “worker” is an employee at law or not, they are still entitled to benefits like a minimum wage, the right to a regular pay period, full ownership of their tips, and clarity about how payments are calculated.  It also includes rights to have disputes settled in Ontario, freedom from reprisal for asserting or asking about rights, and notice periods and reasons for removal if the worker is removed or disqualified from the platform.  Directors of the operator company can be found responsible for unpaid amounts owing to workers.  There are numerous other provisions relating to enforcement and compliance, much of which mirrors the ESA. 

While the intent of the legislation seems to be to rein in established operators and provide protections to the workers that use them, commercial lawyers whose clients deal in this space are advised to monitor developments and to watch for the date of proclamation.  Companies that provide or are looking to provide a platform for gig workers to accept tasks, but do not fall under the planned definition of “operator”, should watch for developments as to whether other classes of work will be prescribed.  Terms of use and service for all relevant operators should be carefully reviewed in anticipation.

Key Points
Subject employers that had 25 or more employees on Jan. 1, 2022 need a “Disconnecting From Work” policy already;
Subject employers that had 25 or more employees on Jan. 1, 2022 need a “Digital Monitoring” policy by October 11, 2022;
Employers that increase to 25 or more employees for Jan. 1 of a future year will need those policies by March 1 of that year;
Business and IT Consultants and organizations that use them should be mindful of the new ESA thresholds and definitions and should adjust agreements accordingly before Jan. 1, 2023;
Non-compete agreements should be removed from employment contracts, except for the limited business sale
and executive circumstances;

Organizations that would or could come under the auspices of the Digital Platform Workers’ Rights Act should take anticipatory steps to ensure compliance when it is proclaimed into force. 

Dan Lawlor is a solicitor practicing who practices real estate, commercial and estates law at Weisz, Rocchi & Scholes.  He returned to live in downtown Hamilton after studying law at McGill in Montreal.  He is friendly and can be reached at [email protected] and 905-523-1842 x4312.

Endnotes

Subject to certain exceptions, including a sizeable tranche o federally regulated employers.

Employment Standards Act, 2000, S.O. 2000, c.41, s.21.1.1 [‘ESA’]

https://www.ontario.ca/document/your-guide-employment-standards-act-0/written-policy-disconnecting-from-work#section-4

ESA, supra, s.21.1.2(4).

ESA, supra, s.67.2(3).

ESA, supra, ss. 67.2(4)-(5).

ESA, supra, ss. 3(5) and 3(7).

ESA, supra, s. 41.1.1(1) and (8). 

https://www.ontario.ca/document/your-guide-employment-standards-act-0/recent-changes

Digital Platform Workers’ Rights Act, 2022, S.O. 2022, c.7, Sched. 1, s.(1) [DPWRA]

DPWRA, supra, ss.7-14

DPWRA, supra, s.15