In Cressey Construction Corporation v. Parolin, the British Columbia Court of Appeal (“the Court of Appeal”) upheld the British Columbia Supreme Court’s (“Supreme Court”) decision that the employer constructively dismissed the employee when the company ordered her to return to the office full-time without providing her with reasonable notice. The Court of Appeal held that the remote work arrangement constituted an enforceable express oral term of the employee’s agreement with the employer. The Court of Appeal dismissed the employer’s appeal.
Background
In this case, the employee worked for the employer for approximately 18 years. For the last five years of the employment relationship, the employee was the employer’s Director of Marketing. The employee’s employment contract’s terms were primarily oral except for a written job description of the Director of Marketing’s roles and responsibilities. Following the employee’s return from maternity leave, the employee’s request for a flexible work schedule was approved by the employer.
When the COVID-19 pandemic began, the employer’s employees began working from home. Approximately six to eight weeks later, most of these employees returned to the office. The employee, with a number of senior managers’ approval, continued to work from home. The employer verbally confirmed that the employee’s work location was immaterial so long as her work was being done. In May 2023, the employee followed up with her new senior manager about her request for a salary increase. During the employee’s discussion with her new senior manager, the employer directed her to return to the office on a full-time basis, offered her a modest salary increase and suggested the employee’s director role was mischaracterized and was closer to a Marketing Manager. The employee subsequently resigned, treated the employer’s directive as constructive dismissal and subsequently claimed a wrongful dismissal. The employee chose to start up her own businesses.
Constructive dismissal can occur when one of two sets of circumstances arises. The first circumstance is if the employer makes a unilateral and substantial change to an essential term of the employment contract. The kind of changes that meet the first circumstance will depend on the facts of the case and cannot be generalized. If a unilateral and substantial change has occurred, then the next question is whether a reasonable person in the same situation as the employee would have believed that an essential term of employment was substantially changed. The second circumstance that can give rise to a constructive dismissal is if the employer’s course of conduct, through a series of acts, more generally shows that the employer no longer intends to be bound by the employment agreement.
Issues
The Court of Appeal examined whether the express oral agreement regarding a remote work arrangement was a term of the employee’s employment and whether the employer’s directive of returning to the office, without reasonable notice, constituted constructive dismissal. In addition, the Court of Appeal considered whether the employee had failed to mitigate her damages by finding other employment.
Findings
The Court of Appeal found that through the parties’ words and actions there was an express oral term in the employee’s employment contract to work from home. The employer’s revocation of the employee’s ability to work from home was a unilateral change to an essential term of the employment agreement. In particular, the employer constructively dismissed the employee when it mandated her to return to the office full-time five days a week without providing her reasonable notice. The Court of Appeal highlighted that a reasonable person (in the employee’s circumstances) would objectively view a without notice return-to-office mandate as a substantial change to the employee’s employment because it altered her place of work. The Court of Appeal emphasized the employer neither obtained the employee’s consent nor provided reasonable notice of the change. The Court of Appeal also held that establishing a business is a recognized means of mitigation.
Key Takeaways
This case is an important reminder for employers and employees that oral and written terms of employment can be shaped by the parties’ actions and words. For employers, before introducing a unilateral and substantial change to a written or oral essential term of an employment agreement, it must provide reasonable discussion and/or notice to its employees unless the employees consent to or acquiesce to such change. In addition, expectations surrounding remote work arrangements should be clearly communicated to employees, actively managed and carefully implemented.
If you have any questions about constructive dismissal or other workplace issues, please reach out to Tiffany Lee at lee@pushormitchell.com.
