Ontario’s small claims court has ruled that recalling an employee from a remote working arrangement to in-person work can amount to a constructive dismissal giving rise to liability for damages.
The employee in question, Lesley Byrd, had worked for Welcome Home Children’s Residence Inc. in Ottawa since 2018, but without a written contract of employment. She was, in her employer’s words, a valued employee who was promoted to manager of clinic support in 2019.
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Byrd’s husband was in the Canadian Armed Forces. In May 2020, the CAF advised it was posting him to Belgium for about three years. Welcome Home allowed Byrd to work remotely and she did so for more than a year, at which point the employer asked her to return to work in person or resign. Byrd sued for constructive dismissal in Ontario’s small claims court, where she succeeded.
Deputy Judge Caroline Kelly reasoned the ultimatum provided by the employer was a repudiation of an accepted part of Byrd’s employment contract and amounted to a termination of employment. In concluding that working remotely was a fundamental term of Byrd’s employment, Kelly emphasized the employee had worked remotely and continuously for more than a year, during which time Welcome Home registered no complaints.
As well, Kelly observed, both parties knew that Byrd’s husband’s posting was for a fixed period and that Lesley would be working remotely for the entire duration.
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“Here, there was no credible evidence that the defendant communicated a specific right to recall the employee until March 2022 (approximately 20 months after the employee’s move),” Kelly stated. “A fundamental term such as a right to recall an employee from Europe to work in person in Ottawa calls out for clear and timely notice to the employee. Here there was none.”
The upshot was that Byrd had been constructively dismissed. But Puneet Tiwari, a partner at Levitt LLP and who represented the employer, believes the decision is wrong.
“If the location of your workplace is a term of employment, then changing it — like any other fundamental term of employment — can give rise to a constructive dismissal. But if working remotely is merely a benefit of your employment, then it’s not a fundamental term.”
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Tiwari also notes the employer appealed Kelly’s decision and that the case “settled for pennies” thereafter. “In any event, small claims court decisions are not binding precedents.”
Still, Mark Van Ginkel, a senior associate at Filion Wakely Thorup Angeletti LLP and who wasn’t involved in the case, warned in a client bulletin that “employers should ensure that they set the term of the arrangement in writing to minimize the risk of liability” when allowing an employee to work remotely and that they review their standard agreements accordingly.
“Where an employee requests a hybrid or remote work arrangement, if granting that request, the employer should consider entering into a remote work agreement that reflects the employer’s expectations and specifically sets out the right to recall the employee to in-person work”, Van Ginkel advised.
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