During the COVID-19 pandemic, many employers adapted to the challenges posed by the global health crisis by offering remote and hybrid work arrangements. These changes allowed businesses to continue operating while prioritizing employee health and safety.  Now, as many organizations implement back-to-work mandates, the transition back to the office comes with challenges.

One such challenge is illustrated in Byrd v Welcome Home Children’s Residence Inc. [Byrd], where the Ontario Superior Court of Justice (Small Claims Court) (“ONSC”) found that an employer constructively dismissed an employee after making significant, unilateral changes to her remote work arrangement. This case highlights the risks employers face when altering remote work arrangements without clear communication and agreement.

Background

The employer operated a care home, and the employee began working for them in 2018. The employee worked on an hourly basis, and there was no written employment contract outlining specific terms of the employment relationship.

In May 2020, the employee informed the employer that her husband had been posted by the Canadian Forces to Europe, and the employer agreed to let her continue working remotely from Belgium. However, the remote work arrangement was not formalized in writing

For the next 13 months, the employee worked remotely, with her pay remaining unchanged. During this time, she began working a second job at a school on the Canadian Forces Base in Belgium without informing her employer. In fall 2021, the employer hired an on-site manager and told the employee she was only permitted to work 15 hours per week. Upset by this change, the employee took a two-week vacation, during which she retained counsel.

In January 2022, the employee was informed that many of her responsibilities had been reassigned to the on-site manager. On March 10, 2022, the employer’s counsel offered the employee a choice: return to the office in person or resign. The employee chose to resign on April 28, 2022, claiming that she had been constructively dismissed.

The Decision

The ONSC found in favor of the employee, ruling that she had been constructively dismissed. The court concluded that the employer had made unilateral and fundamental changes to the employee’s employment contract by altering the remote work arrangement without her agreement. The court determined that the employer’s ultimatum to return to the office or resign constituted a repudiation of the employment agreement, amounting to a termination of employment.

The court emphasized two factors in its finding that the employee was constructively dismissed:

1. Condonation of Remote Work: The employer had accepted the employee’s remote work arrangement for 13 months without issue, even as her hours fluctuated. The court found that this arrangement became an accepted term of her employment.
2. Lack of Clear Communication on Right to Recall: The court noted that there was no credible evidence showing that the employer communicated a specific right to recall the employee until approximately 20 months into the remote work arrangement.

The ONSC also noted that the employeehad no duty to inform the employer about her additional employment at the school because her contract did not require her to work exclusively for the employer.

As a result, the employee was awarded $18,860, reflecting a 6.5-month notice period, with some deductions for income earned from her second job.

Takeaways for Employers

This case highlights the importance of clear, written agreements and policies when it comes to remote work arrangements. Here are some key takeaways for employers:

• Review Employment Agreements: When an employer authorizes remote work, it is crucial to enter into a written agreement that sets clear terms for the arrangement. This agreement should explicitly state that the employer retains authority over where work is performed and that any future relocations require prior approval. Without such a term, there is a risk that employees may have the right to work from locations that were not originally agreed upon.
• Clarify Remote Work Cancellation Terms: Employers should ensure that the agreement outlines the terms for modifying or terminating a remote work arrangement. Once an employer permits remote work over an extended period, they cannot unilaterally require an employee to return to in-person work without mutual agreement. Doing so may expose the employer to a constructive dismissal claim.
• Develop and Update Policies: Employers should create and regularly update a “Work from Home” policy that clearly communicates expectations regarding productivity, hours of work, and any monitoring mechanisms. A robust policy helps establish clear boundaries and mitigates risks associated with remote work.

As return-to-work initiatives become increasingly common, employers must be mindful of the risks of altering work arrangements without proper communication or documentation. The Byrd case underscores the legal and financial consequences of mismanaging remote work policies. By clearly documenting remote work arrangements, updating policies, and communicating expectations, employers can reduce the risk of constructive dismissal claims and ensure smoother transitions for all parties involved.

This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.