Key Employment Law Changes for Employers to Start 2023 on the Right Foot
Updated: Jan 13
January 12, 2023 - Miranda Desa
Changes to the Requirements for Employment Agreements
Many people don’t know this, but the termination provisions in most Ontario employment law agreements are likely invalid. Mid-2020, the Ontario Court of Appeal increased the burden on employers in terms of what a termination clause needed to be enforceable. Since then, the Courts have consistently applied a higher standard.
Practically, What does this Mean for Employers?
Employers with out-of-date termination provisions won’t be able to rely on the termination clauses, when letting go of employees, as they won't be enforced by a court. In practice, that means that employers would be held to pay common law notice instead of what was agreed in the contract. For many employers this means paying employees approximately one month of notice for each year of service, instead of the Employment Standards Act minimum requirements of approximately one week per year. It also means unpredictability and increased risk of litigation.
What can Employers do to Reduce their Risk?
Employers can reduce their risk by seeking legal advice on employment agreements without updated termination clauses and the possibility of putting new agreements in place.
Employers looking to terminate an employee should always seek legal advice on their rights/obligations.
New Non-Compete Agreements Banned
In late 2021, the Ontario Government banned the use of non-compete agreements in new employment contracts and other agreements with an employee. This means that outside of a few narrow exceptions, new agreements prohibiting employees from obtaining new employment in competition with your business or within a particular geographical area of your business are likely unenforceable. Including such clauses in employment contracts may also render other parts of the agreements invalid.
What can Employers do to Protect their Businesses?
Now more than ever it is important for employers to put in place policies and agreements protecting their intellectual property and confidential information as well as ensuring ownership of their proprietary property.
New Electronic Monitoring Policy Requirements
As of Fall 2022, the Ontario Government requires employers with 25 or more employees to have an electronic monitoring policy. The new law requires that employers be transparent in their practices of monitoring employees and why they are doing it. This information must be in writing and circulated to employees.
Implementing a policy is important to reduce risk and comply with legal obligations. Although, when putting in place such a policy, it is important to be accurate about practices in place. If a policy includes standards higher than those legally required, the employer may be held to them. Also, employers that obtain information from undisclosed electronic monitoring may be prohibited from using that information in subsequent legal proceedings.
New Disconnecting from Work Policy
As of mid-2022, the Ontario Government requires that employers with 25 of more employees have and distribute a policy on disconnecting from work. Disconnecting from work policies should include things such as the need for after-hours communications and basis for same, as well as expectations regarding out-of-office alerts.
Interestingly, despite its name, the new law does not create a right to disconnect, instead it requires that employers spell out employee’s obligations outside of office hours. Although, when putting in place such a policy, it is important to be accurate about practices in place and to be careful about not promising more than you can deliver. Employers that put in place policies with heightened standards may be held accountable to them.
Keeping up to date with changes in employment law can be challenging, but is an important way to mitigate risk as an employer.
The information on this site is not, nor is it intended to be, legal advice. You should consult a lawyer for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail.