By Simcha Walfish

In Fall 2021, the Government of Ontario introduced the Working for Workers Act, which included a new prohibition on non-compete clauses. The Minister of Labour provided the following rationale: 

While these agreements are almost never legally enforceable, employers often use them to intimidate their workers. These agreements generally say that a worker can’t seek opportunities at other companies in the same field for a period of time after they leave their current job, and this might stop many of them pursuing exciting opportunities that would help them grow professionally. This isn’t fair to workers who are eager to advance their careers and this isn’t fair to the thousands of small start-ups we have in Ontario who are starved for talent. This change would help them find workers with the skills they need to scale up, grow and prosper.

The legislation amended the Employment Standards Act (ESA) to ban non-compete clauses, except for executives and in certain circumstances related to the sale of a business. It prohibited employers from entering into employment contracts with non-compete clauses and stipulated that those agreements are void. 

Are agreements signed before October 25, 2021 void?

The ban on non-compete agreements was made effective retroactively to October 25, 2021, the day the legislation was introduced in the legislature. Early interpretations of the prohibition have therefore concluded that it only applies to agreements signed on or after October 25, 2021. The Ministry of Labour has taken the position in several publications that the new legislation “does not prohibit or void non-compete agreements that were entered into prior to October 25, 2021.”  

The same conclusion was reached in Parekh et al v Schecter et al, where the Superior Court concluded that, because the Legislature specifically chose October 25, 2021, as the date for these provisions to come into force, they did not apply to agreements signed before that date.

However, there are multiple potential arguments that all non-compete clauses are now void for workers governed by the ESA. 

First, the new ESA provisions themselves do not refer to an effective date of October 25, 2021. It is questionable to rely heavily on the date of coming-into-force when interpreting legislation that is meant to provide minimum standards that apply to all employees. The Legislature could have referenced an effective date in the legislation if that were its intention. 

Second, the ESA is meant to provide minimum standards that apply to all employment contracts. As the employee argued in Parekh, the ESA should not be interpreted in a way that would create different rights for different employees, based on when they signed their contract. 

Third, it is not unusual for rights under the ESA to change during the life of an employment contract, which can last decades. When the ESA is amended, unless the legislation provides for a transitional period, it is the current ESA that governs employment agreements, not the version of the ESA as it was in force at the time of the signing of an agreement. Workers do not need to undertake an archaeological study of their contract, to determine what version of the ESA applies to each clause.

Ultimately, as the Minister stated, even before this legislative change, non-compete clauses were rarely enforceable. Therefore, regardless of whether future decision-makers follow Parekh or take a different approach, non-compete clauses are likely to continue to be found void. 

If you have questions or concerns about whether your non-compete clause is valid or any other questions about your employment, we are here to help. Please call 613–567–2901 or email info@ravenlaw.com to consult one of our experienced employment lawyers. 

[Please note that this article is for informational purposes only, and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]

RavenLaw supports liveable wages for all employees, including articling students. As employees, articling students are entitled to compensation for the valuable work they perform in law firms, organizations, and public employers across Ontario. We have written to the LSO Benchers to express our firm’s position that articling students should be provided with a liveable wage for their work and, in the alternative, no less than the bare minimum pay outlined in the Employment Standards Act. A copy of our firm’s letter is available here.

We also endorse the positions of many others calling for the protection of minimum wage for articling students by the Law Society of Ontario (“LSO”) from the following organizations and firms:

• CUPE Local 1281
• Canadian Association of Labour Lawyers
• Goldblatt Partners
• The Canadian Association for Legal Ethics
• Durant Barristers (supported by 57 signatory firms)
• Peter Wardle of Singleton Urquhard Reynolds Vogel LLP
• Alexander Overton
• Law Students’ Society of Ontario
• Federation of Ontario Law Associations

We recognize the precarious and vulnerable position of articling students. As such, regardless of the outcome of the LSO’s consultations on the issue of minimum compensation, RavenLaw LLP will be supporting articling students seeking to organize their workplace, pro bono. We invite articling students interested in unionizing to contact us at info@ravenlaw.com

Wassim Garzouzi recently published a chapter in the edited collection, Collective Bargaining in Higher Education. Wassim’s chapter addresses the myth of academic exceptionalism in organizing and collective bargaining within academia, examined through the lens of a successful organizing drive and first contract achieved by the part-time law professors at the University of Ottawa.

The chapter is available here. The interest arbitration decision referred to in the chapter can be found here.

The Office and Professional Employees International Union (OPEIU) was successful in two grievances challenging ORNGE’s Drug and Alcohol Policy. Specifically, the OPEIU challenged the ORNGE’s “zero-tolerance” approach to medical cannabis, and its practice to treat prescribed medicinal cannabis differently from other types of medication.

Arbitrator Gail Misra declared ORNGE’s policy to be discriminatory and unreasonable. She concluded that “having a blanket edict that if an employee can only use medical cannabis to treat their illness, they cannot do a safety sensitive job, is draconian and inflexible, and is not supported by the [Canadian Human Rights Act] or the jurisprudence.”

As a result, Arbitrator Misra declared the policy to be “unreasonable to the extent that it fails to treat prescribed medicinal cannabis as a “medication”.  Furthermore, “having found that Ornge’s inflexible position regarding cannabis use in a safety sensitive position is unreasonable, I also find that the Policy was drafted in a discriminatory manner in that it does not properly provide for accommodation to the point of undue hardship for those working in a safety sensitive position, who, due to their medical condition, are prescribed cannabis for medical treatment purposes.”

The OPEIU was represented by Wassim Garzouzi, Julia Williams and Patt Gibbs.

The decision can be accessed here.

By Dayna Steinfeld

In Manitoba, The Employment Standards Code (“ESC”) establishes basic and minimum rights and standards for provincial employees. Where the ESC applies to a worker’s job, these rights and standards are mandatory. This kind of legislation is not unique to Manitoba. Employment standards statutes are found in every province and in the federal jurisdiction, and there are many general similarities between the Manitoba ESC and legislation in other provinces. However, each piece of legislation is distinct and there are differences in the specific rights and entitlements established through the legislation in each province. It is important for workers in Manitoba to know their rights under the ESC to help avoid being taken advantage of in their jobs. Below are some key areas where questions commonly arise for employees in Manitoba.

Can my employer make deductions from my wages?

Many workers have been faced with the situation of having the cost of a uniform or tools deducted from their pay. But is this permitted under the ESC?  

In  Manitoba, employers are generally prohibited from making deductions from employee wages, unless the deductions are required by federal or provincial law (such as EI or CPP contributions) or permitted by a court order. Employers are specifically prohibited from making deductions for uniforms and for any amount to cover any cost arising from faulty work of the employee or damage caused by the employee, or to cover a cash shortage such as in a “dine and dash” situation. 

There are certain circumstances where other deductions from pay are permitted:

• With the employee’s consent, the employer may deduct an amount for something that is provided as a direct benefit to the employee which the employee was not required to obtain from the employer.
• An amount for business supplies or tools may be deducted, but only if several requirements are met: the employee was not required to purchase the supplies or tools from the employer; the employee is able to keep the supplies or tools when they are no longer working for the employer; and the employer is not required by law to provide the supplies or tools to the employee.
• With the employee’s consent, the amount of a payroll error that benefited the employee or a cash advance paid to an employee may be deducted from wages (but the deduction cannot include any amount for interest, service charge, or fee).
• With the employee’s written authorization, the minimum amount payable by the employer for an offence committed by the employee that is being prosecuted against the employer for a photo radar or red light camera ticket may be deducted from wages.

When am I entitled to a leave of absence?

The ESC provides for a variety of leaves of absences that are available to employees should different circumstances arise in their lives. These are unpaid leaves of absence. The purpose of including the leaves in the ESC is to protect the rights of workers to take necessary time away from work while ensuring they will have a job to return to after their absence from the workplace. 

The leaves of absence in the ESC include bereavement, compassionate care, family responsibility (including the health of the employee), interpersonal violence, critical illness, serious injury or illness, maternity and parental leaves. The lengths of time available as protected leaves vary depending on the type of leave being taken. 

In Manitoba, there is also a new public health emergency leave. This is a temporary measure in the ESC that provides employees with job-protected leave related to the COVID-19 pandemic. It is available where an employee is unable to work due to circumstances related to the pandemic, such as a public health requirement to quarantine or providing care to a family member due to school or daycare closures, and is available for the length of time the circumstance persists. 

Significantly, the ESC prohibits employers from requiring a doctor’s note to support an employee’s eligibility for public health emergency leave or other protected leaves available under the ESC. This means that employees taking family responsibility leave for their own health cannot be mandated by their employer to provide a doctor’s note. 

Am I entitled to severance pay?

The term “severance” is often used in the context of an employee losing their job. You may have also heard about employers being obligated to pay “severance” under employment standards legislation. However, this term has no meaning under the ESC. Unlike other employment standards legislation, such as in Ontario, there is no obligation on Manitoba employers to provide severance pay on termination of employment. The requirement in the ESC is to provide notice of termination, or pay in lieu of notice, in accordance with the minimum amount of notice set out in the ESC. 

Employers or lawyers in Manitoba may still refer to offering or negotiating a “severance” package. That typically refers to a package or pay-out offered by an employer at the time of termination to satisfy its obligation, under the common law, to provide reasonable notice of termination. (For more information on the meaning of common law reasonable notice, see: “What is reasonable notice?”). Common law reasonable notice is an amount beyond the minimum required under the ESC that is intended to help bridge an employee from their old job to a new position. The question of whether you may be entitled to common law reasonable notice depends on the terms of your employment contract. However, the rights provided on termination under the ESC do not include a separate right to severance pay.

Conclusion 

The ESC establishes important rights for workers. It is Manitoba-specific legislation that contains unique standards, limits, and entitlements. Employees should be aware of the specifics of the rights and responsibilities in the ESC. A Manitoba employment lawyer can help address questions or concerns workers may have about whether the requirements of the ESC are being met by their employer. 

[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]

Wassim Garzouzi speaks to Ottawa Morning with Robyn Bresnahan on the Ontario Government’s proposed amendments to the Employment Standards Act, specifically as they relate to the right to disconnect.