Reversing Remote Work Arrangement Triggers Constructive Dismissal Considerations

Since the COVID-19 pandemic, we have seen a surge of employees express a preference for remote work, no longer prepared to come into the office everyday or a few days a week. Meanwhile, we have also seen employers begin to recall employees to the office, mandating in-person attendance. Employers may feel there are advantages to returning staff to office, including filling otherwise empty office spaces and building community or morale. After all, it is not a novel argument that remote work was supposed to be temporary and that when everything "returned to normal", employees would be called back.

Question is - when does the attempt to reverse remote-work arrangements become constructive dismissal?

In the recent case of Byrd v. Welcome Home Children's Residence Inc., the Small Claims Court considered whether an employer's demand that the employee return to office after working abroad remotely for a year amounted to constructive dismissal.

Background

The Plaintiff was employed by the Defendant since April 2018 as the Manager of a care home. She did not have a written employment agreement and did not have any restrictions on her work exclusivity. She was paid on an hourly basis and had no fixed schedule.

Due to her husband's posting to Europe with the Canadian Forces, the Plaintiff moved to Europe and continued to work for the Defendant remotely. Prior to the Plaintiff's move, there were discussions between the two parties regarding how the Plaintiff could work remotely, but there were no written agreements regarding this arrangement and no mention of when the Plaintiff had to return or whether the Defendant would be able to ask for her return to in-person work. For the first year of her husband's posting, the Plaintiff continued to work full-time remotely for the Defendant without any issues with the arrangement, her performance or the number of hours she worked. While in Europe, with the time zone difference, the Plaintiff picked up a secondary job locally.

After a year of the Plaintiff working remotely from Belgium, the Defendant announced the hire of an on-site Manager. As a result, the Plaintiff's hours were reduced significantly, and most of her responsibilities were assigned to the new on-site manager. This was upsetting news for the Plaintiff and communication broke down between the two parties. The Defendant, through the communication of their lawyer, indicated that it was expected for the Plaintiff to be working in person and relayed two options for the Plaintiff: re-attend physically or resign. In response, the Plaintiff brought a constructive dismissal action.

Analysis

The Court found that the employer had accepted the Plaintiff working abroad for more than a year and that it had become a term of her employment contract. Since there had been no performance concerns or interruptions during the time that the Plaintiff was working remotely, the Court found that the issue was merely location.

Further, after reviewing a letter written by Defendant's counsel, the Court concluded that the Plaintiff had not been offered the option to work remotely 15 hours a week, contrary to the Defendant's allegations. With this, the Court found that the Defendant's ultimatum a year later without clear and timely notice was a repudiation of the employment agreement and a termination of the Plaintiff's employment. Accordingly, the Court found that the Plaintiff was constructively dismissed.

On the issue of the second job that the Plaintiff picked up, the Court made a similar finding. The employment relationship did not require the Plaintiff to work exclusively for the Defendant and thus, in her case, she did not have a duty to inform the Defendant of this additional employment. Nonetheless, the Court did conclude that the Plaintiff's earnings from her second job did amount to mitigation income and made the deductions from the awarded damages.

Takeaway

Although the events of this case did occur during the COVID-19 pandemic period, the circumstances of this case are not linked to the pandemic. Therefore, this case can be applicable in a broader sense to all employees who work remotely, regardless of whether the remote work arrangement was triggered by the COVID-19 pandemic. After all, from what we see, the longer the employers are allowed to work remotely, the more likely they may be able to claim that the remote work arrangement has become a permanent and fundamental term of employment.

This case alerts employers that when allowing an employee to work remotely, it is important to ensure that the terms of this remote work arrangement, including the right to recall, is set out in writing to minimize the risk of liability. This is especially the case if remote work can become an accepted part or "fundamental term" of the employment relationship.

With that in mind, employers who have allowed for hybrid or remote work arrangements may wish to review their employment agreements to ensure that this issue is addressed. If this is not clearly addressed, and if employees are allowed to work remotely, a written remote work agreement that addresses expectations, including the right to recall, might be something worth considering.

If you have any questions regarding your workplace rights and entitlements, please reach out to a member of the Lee Workplace Law team.