Workplace Arrangements – BC Court of Appeal affirms constructive dismissal claim by remote worker required to return to the office

Summary

The British Columbia Court of Appeal recently considered when workplace arrangements become binding terms of employment in Cressey Construction Corporation v. Parolin, 2026 BCCA 199. The issue arose in the context of a wrongful dismissal claim brought by a former employee after her employer required her to return to working in the office.

Background

Tracy Parolin worked for Cressey Construction Corporation (“Cressey”) for 18 years. She was hired as a Development Manager and was later promoted to Director of Marketing, a role she held until her employment ended on May 17, 2023.

Ms. Parolin’s employment terms were oral and came to include flexible hours, requested by Ms. Parolin in 2013 to accommodate her childcare responsibilities, and a remote work arrangement, adopted in 2020 during the COVID-19 pandemic due to health concerns relating to one of Ms. Parolin’s children. After her reporting manager left in 2021, Ms. Parolin contacted Cressey’s Executive Vice President to confirm that she could continue working from home. He advised that, “as long as the job was getting done, it did not matter where she worked.” By 2023, Ms. Parolin was working full-time from home.

On May 10, 2023, Ms. Parolin met with Cressey to seek a salary increase she had been pursuing since her promotion to Director of Marketing. Cressey offered only a modest increase, on the basis that her role was closer to that of a Marketing Manager, and directed her to return to the office full-time, five days a week. Ms. Parolin treated this directive as constructive dismissal, ceased working for Cressey on May 17, 2023, and later brought a wrongful dismissal claim.

The trial judge found that the parties’ conduct supported Ms. Parolin’s position that both her flexible hours and remote work arrangement had become terms of her employment agreement. In particular, the judge held that the flexible hours, which had been in place for 10 years, and the remote work arrangement, which had been in place for 3 years, had become binding terms of employment through Cressey’s longstanding acceptance of them. The trial judge also concluded that the remote work arrangement was an essential term of Ms. Parolin’s employment and could not be changed without agreement or reasonable notice. Accordingly, the trial judge ruled that, by imposing a full-time return-to-office mandate without Ms. Parolin’s agreement and without notice, Cressey changed an essential term of employment and triggered Ms. Parolin’s constructive dismissal.

Lastly, the trial judge found in Ms. Parolin’s favour on the issue of mitigation. Following a wrongful dismissal, an employee has a duty to take reasonable steps to mitigate their loss by seeking an alternative source of income. Although Ms. Parolin pursued her own business ventures rather than apply for comparable employment, the trial judge held that those efforts were nonetheless reasonable.

Ruling of the Court of Appeal

The Court upheld the trial judge’s decision. It was satisfied that the remote work arrangement was a term of Ms. Parolin’s employment and that Cressey’s unilateral return-to-office mandate, imposed without reasonable notice, constituted constructive dismissal.

The Court agreed with the trial judge that Ms. Parolin’s right to work from home was an express oral term of her employment agreement and, in the circumstances, an essential one. In reaching that conclusion, the Court emphasized that contractual interpretation turns on the parties’ objective intentions, as revealed by their words and conduct. Here, those intentions were reflected in Cressey’s express agreement to Ms. Parolin’s request to work from home and its acceptance of that arrangement for three full years.

Citing to the Supreme Court of Canada’s decision in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, the Court confirmed that constructive dismissal occurs where:

1. the employer makes a unilateral change in breach of the employment agreement; and
2. the breach alters an essential term of the employment agreement.

The Court was satisfied that both requirements were met in this case, and that Ms. Parolin had not accepted or acquiesced to the change. Accordingly, she was constructively dismissed.

At the first stage, the Court found that, by requiring Ms. Parolin to return to the office full-time, five days a week, without reasonable notice, Cressey had unilaterally changed and breached an essential term of her employment.

At the second stage, the Court considered all of the circumstances to determine whether “a reasonable person would conclude that the employer no longer intended to be bound by the terms of the contract.” In this respect, the Court affirmed that it was reasonable to conclude that a person in Ms. Parolin’s circumstances would objectively view the return-to-office mandate, without notice, as a substantial change to her employment because it altered her place of work.

Lastly, the Court also agreed that Ms. Parolin had not failed to mitigate her damages, confirming that establishing a business is a recognized means of mitigation, relying on the authority of the Ontario Court of Appeal’s decision in Peet v. Babcock & Wilcox Industries Ltd., 2001 CanLII 24077 (ONCA).

Key Takeaway

The Court of Appeal’s reasons in this case serve as a helpful reminder that the terms of employment, whether written or oral, can be shaped by the parties’ conduct. Accordingly, employers should be mindful when implementing changes to working arrangements related to essential terms of employment, such as work location and hours, especially if the arrangement is not a temporary one. Before introducing a unilateral and substantial change to an essential term of employment, employers must ensure that reasonable notice is provided. Otherwise, employers must obtain employees’ consent.