Earlier this year, a case in Ontario’s Small Claims Court ruled that in certain situations, recalling an employee from remote work back into the office can constitute constructive dismissal. As a result, damages were owing for wrongful dismissal. This raises the question of what exactly constructive dismissal is and what employers can take away from cases like this.
When does a return-to-office order become constructive dismissal?
Constructive dismissal occurs when an employer unilaterally changes a material term of the employment agreement. This can take the form of a demotion, a large pay cut, or as in this case, the unilateral withdrawal of remote working arrangements. When a constructive dismissal occurs, an employee is treated as if they were terminated without cause, even if the employer never explicitly did so. If an employee is constructively dismissed, they can receive severance, up to 24 months or even higher, depending on factors like the employee’s age, position, tenure, and salary.
It should be noted that each constructive dismissal case will turn on its specific facts. For example, in this specific case, the employer had allowed the employee to work remotely for over a year before attempting to recall her back to the office. The judge also observed that the reason for the remote work was that the employee’s husband was stationed abroad as a member of the Canadian Armed Forces. The employer was aware that this would be for a fixed term of three years when it consented to the work-from-home arrangement. All this contributed to the court’s finding that a constructive dismissal had occurred.
How can employers protect themselves when offering remote work?
Employers that want to allow remote work while maintaining the right to recall workers to the office if needed should take care when drafting their employment agreements. It should be eminently clear what the expectations are regarding the workplace, and that if remote work is allowed, it is subject to the discretion of the employer.
That said, employers should also take care not to be too black and white in their recall to office. There may be certain employees with a strong claim to being able to work from home, for example on the basis of disability (such as making travel difficult) or family status (such as taking care of children or ailing family members). Unreasonably denying remote work when it would not cause undue hardship for the employer could be construed as discrimination contrary to human rights legislation. While this can give rise to damages in and of itself, it can also contribute toward a finding of constructive dismissal.
What should employees and employers know about remote-work agreements?
Remote work can provide flexibility for both employees and employers, but changing business needs could make it necessary to bring employees back into office. To make the process as seamless as possible and minimize the risk of significant legal exposure from constructive dismissal cases, you should speak to an experienced employment lawyer when drafting your employment agreements. If you would like to discuss crafting remote working arrangements to guard against potential constructive dismissal claims, please contact Whitten & Lublin online or by phone at (416) 640-2667 today.
Author – Sohrab Naderi
