Canada: Paid sick leave, the right to disconnect and noncompetes

Employer Action Code: Act

Final legislation in British Columbia establishes a new employer-paid sick leave entitlement, while final federal legislation in Canada will increase the paid sick leave entitlement for employees in federally regulated industries (such as banking, communications and airlines). Ontario’s Bill 27 (Working for Workers’ Act, 2021), which has received royal assent, introduces a “right to disconnect” for employees and — subject to certain exceptions — prohibits the use of noncompete agreements.

Key details

• From January 1, 2022, eligible employees in British Columbia can take up to five days of paid personal illness or injury leave per year, in addition to the current entitlement to three unpaid days. Unused paid leave may not be carried forward. Employees (including part-time, temporary or casual employees) who have worked at least 90 days for the employer are eligible, excluding employees in federally regulated sectors or in roles not subject to the Employment Standards Act. Leave pay will be based on total pay in the 30 days before the leave, divided by the days worked in that period.
• Amendments to the Canada Labour Code (CLC) will allow employees in federally regulated industries to take up to 10 days of paid medical leave per year, with one day earned for every completed month of service (up to the 10-day maximum). Unused leave would be eligible to carry forward to the next year; however, each day carried forward would offset the number of days that could be earned in the new year so that the total number of days available in a year would be 10 at most. Leave pay would be at the employee’s “regular rate of wages” for “normal hours of work” (to be defined in future regulations). The current entitlement to five days’ leave (three of which are paid) for personal illness or injury under the CLC will be repealed.
• Under Ontario’s Bill 27:
• Employers with 25 or more employees are required to have a written policy on disconnecting from work, defined as “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.” The details of what should be in the policy will be set out in regulations that have yet to be released. Affected employers have until June 2, 2022, to prepare their first policy. Employers must provide employees a copy within 30 days of preparing a new or amended policy, and new employees must receive the policy within 30 days of being hired.
• Retroactive to October 25, 2021, employers may not enter into an employment contract or other agreement with an employee that includes a noncompete agreement (i.e., one that bars the employee from engaging in any business, work, occupation, profession, project or other activity that is in competition with the employer’s business after the employment relationship ends). The only exceptions to this prohibition are in connection with the sale of a business and in the case of an executive employee (defined as the 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 any other chief executive position).

Employer implications

Affected employers should ensure compliance with the changes to leave and employment terms in the various jurisdictions. Ontario has joined a growing list of governments (e.g., France, Italy, the Philippines, Portugal and Slovakia) that have issued legislation regarding employees’ right to disconnect from work, though many details are expected to be covered in pending Ontario regulations.