WFH Constructive Dismissal

There's a developing question of how the 'constructive dismissal' doctrine will be applied to the various employers bringing remote workers back into the workplace.

There's not a lot of case law on this yet. I suspect there will be. But all of the cases I've seen so far have had some fairly exceptional characteristics, none of them speaking directly to an employer's ability to bring an employee back to work.

Briggs

In Briggs v. ABC Insurance Solutions, in BC, an employee had been hired for a hybrid role. The employer was in the course of shifting everyone to be fully in-office (but hadn't done so yet), and the employee was trying to negotiate a commuting allowance. Because the employer wasn't engaging her in a conversation about it (she believed she'd been promised the allowance, but that's not really the point here), she declared that she'd work from home until the details were worked out.

The employer took the position that this was a repudiation of the employment contract, and jumped basically immediately to a position that the contract was terminated. The court wasn't satisfied that she'd repudiated the contract: She was able to work from home, she signaled an intention to work from home, and - critically - the employer never told her "Get back to the office or else."

If the employer had said so, this would have been a much more challenging case. But without that, it was clearly a wrongful dismissal.

Byrd

Howard Levitt recently wrote about this case, that one of his associates litigated. In this case, a manager's husband was posted by his employer (the Canadian Armed Forces) to Belgium in 2020. The employer wanted to keep the employee, so they decided to try to make a remote arrangement work.

After about a year, the employer decided to hire an on-site manager to fulfill some of the on-site functions of her role. A few months later, they made the hire, then told her that her duties were mostly being transitioned to the new hire, and she was being reduced to a maximum of 15 hours per week. On my read of the decision, that was the constructive dismissal.

After getting lawyers involved, the employer basically told her that, if she wanted to keep her job, she had to come back to Canada. She didn't. However, by that time, the constructive dismissal had probably already happened. (Without a pretty clear contractual reservation before she left Canada, however, I don't think it's likely that they'd have been able to pull back on "Sure, you can work for us from Europe" anyways.)

Nickles

This is a recent decision by Applications Judge Farrington in Calgary - however, being careful to highlight that this case doesn't fit the rubric of a post-COVID return to work case, because this employee had always worked predominantly from home, since she was hired in 1986.

Frankly, I doubt that's quite as distinguishing as AJ Farrington thinks. Briggs has similar characteristics, and I think we're going to see a lot more "I was hired during the pandemic to work remotely, I live in a different city, and the employer insisted I start coming into the office" cases.

In this case, the employer changed ownership, and tried to bring her back to work full time. When she took the position that would be a constructive dismissal, they offered her an arrangement that would see her come to the office 2.5 days per week, with the possibility of more in the future. She declined and sued.

Liability in Constructive Dismissal

Farrington found that they hadn't given her enough notice of the change. His analysis suggests that, had they given her more notice of their unilateral change, that would have been enough to hold her to it. There is case law suggesting that to be the case, but I argued in my recent paper in the Canadian Labour & Employment Law Journal that this case law misapprehends the relevant principles: Employers can terminate a contract on notice, but they shouldn't be able to unilaterally change a contract on notice.

Weirdly, when discussing mitigation, Farrington relies on Wronko - which isn't a case about mitigation, but rather stands for the contrary proposition (upon which I relied in my paper) that employers don't necessarily have a right to change a contract.

Ultimately, I have no concerns about the finding that this constituted a constructive dismissal, but I do think that we'll need to give a lot more consideration to the existence/extent of any implied contractual rights to reduce/eliminate flexible work styles - because I think there are very likely cases where employers should be entitled to do so, but I also don't think that "give them a lot of notice" is necessarily a doctrinally sound way of differentiating.

Mitigation

Here's the next hiccup. The employer took the position that the employee should have accepted the new position in mitigation of her loss, taking the partial in-office job, earning the same money, and therefore not suffering compensable economic loss (except maybe commuting expenses?). Applications Judge Farrington wasn't sympathetic to this argument, and rejected it:

"To foist that term upon the employee instead by way of a mitigation obligation would be to ignore the options available tot he employee that arise from the fundamental change. The employer would indirectly get what it wanted notwithstanding the constructive dismissal."

So...I like that analysis. It resonates with me. This aligns with an argument that I've been making for years:

Firstly, it renders a substantial range of employee rights completely moot and devoid of remedy: A unilateral and fundamental change to an employee's duties, working conditions, or job classifications - so long as it does not touch on compensation, or create an atmosphere of hostility, embarrassment, or humiliation - is essentially not an actionable breach, because, even though the employer is repudiating the employment contract, the employee is unable to accept that repudiation without being regarded as having failed to mitigate.  This gives the employer an effective right to impose new terms unilaterally and without notice.

The trouble is that my argument...is contrarian, running up against a body of well-established law, such as the SCC's decision in Evans v. Teamsters, which asserts that employees must take an offer of mitigation employment from the same employer unless it would create an atmosphere of hostility, embarrassment, or humiliation. I expanded a bit on this argument in my recent CLELJ paper, highlighting that Evans (and cases following it, like Chevalier) deny employees remedies for employer actions that don't cause direct pecuniary harm:

Evans provides employers with broad protection against liabilities flowing from repudiatory breaches of the employment contract, wholly undermining most implied and express contractual protections of employees' working conditions. In other words, an employer has the latitude to unilaterally change an employee's duties and other terms and conditions of employment. In turn, employees are expected to simply remain in their position until and unless they find other work.

So I agree with Applications Judge Farrington's critique of the employer position. However, I'm not convinced that, as a matter of stare decisis, it was open to him to reach the decision he did.

Summary Judgment

Applications Judge Farrington invited submissions from the parties as to the appropriate reasonable notice period. (For an employee with nearly 4 decades of service, expect it to be a lot.)

However, there's an interesting notation here that he's following more recent developments in the law, whereas he previously argued that it was not open to Masters (now Applications Judges) to apply Bardal in summary judgment processes.

I wrote about this issue six years ago, noting that Farrington was taking a different approach from his fellow Masters, but Justice Nixon had upheld one of his decisions on appeal. I argued then that Farrington's approach to the issue was wrong, but appeared to be the law in Alberta "for the moment".

It appears to now be settled the other way, properly in my mind, that Applications Judges in Alberta have jurisdiction to assess damages in wrongful dismissal actions.

Expectations Moving Forward

Practically, I think you'll find a few trends emerge as the case law develops in this area.

Preamble - Notes on First Principles

Building on some of the ideas in my paper, I believe that we need to draw a clearer line (generally speaking) between contractual terms, which the employer should need employee consent to change at all, versus working conditions that fall within the discretion of the employer to change as a matter of policy.

Impliedly, employers are entitled to dictate where and how work is done, and that will generally extend to deciding whether work is done at home or at the office. However, I would argue that the applicable principles - and the existing law with some pretty minor tweaks - would support a notion that the line here is drawn in whether a location change either rises to the level of a fundamental change, or else conflicts with implied or express terms of the employment contract.

Whether the change is 'fundamental' engages some pretty grey lines, but to Farrington's point about a 'return to the office' raising different considerations than someone who has never worked in-office, a lot of this has to do with historical practice, how a job was communicated, etc. Changing from "you're required to come in once a week" to "you're required to come in three times a week" probably won't be fundamental, but changing from "you're never required to come into the office" to "you're required to come into the office every day" certainly could be, in the right circumstances.

But the 'implied or express contractual term' side will look to the expectations of the parties. If you hire somebody in a different Province, or if a current employee moves to a different Province and you let them, you're never going to be able to force that employee back to work, unless you've very expressly reserved a right to do so in a properly executed contract with consideration.

The Importance of Notice

While I'm skeptical of the doctrinal merits of a view that an employer change, even if fundamental, can be cured by enough notice, I nonetheless expect many courts to apply such a perspective, especially outside of Ontario.

Within Ontario, the law (and particularly Wronko) supports a position that you can say "no" to a notice of unilateral change like that, and make it ineffective. But aside from that, the courts tend to treat a notice of change as a notice of termination, and suggest that by staying in the job the employee is tacitly accepting the changed job. (There are serious problems of principle and practice here, but it's still a thing.)

However, there are also legitimate circumstances where notice is reasonably necessary, and courts will not look kindly on employers who fail to give adequate notice. When an employee works from home, they will structure their lives in a way that aligns with that. Telling them to come back to the office will require them to make other arrangements, for things such as transportation and childcare responsibilities.

(Childcare responsibilities take on some nuance when it comes to the WFH issue, because why are you attending to your child when you're supposed to be working? However, while there are certainly cases where there's a conflict here, it's also inarguably true that there are circumstances where a parent's presence, but not necessarily active attention, is necessary, and where the child may not materially interfere with the job.)

Human Rights Considerations

Where I expect employers to really struggle here, in practice, is with claims for accommodation on the basis of family status or disability. These will be more common, and more difficult, than flat out refusals to come into the office.

On family status, the law is complex and not entirely settled, but my general view is that employers can reasonably expect that employees will take reasonable steps to arrange for childcare. "I have kids who can't be left at home unattended" means that employers may be required to bend over backwards to provide adequate notice and a significant degree of flexibility, but it probably won't result in a substantive human right that parents are entitled to work from home in perpetuity.

On disability, it will be very context-dependent. I've certainly seen cases, in a number of contexts, of WFH employees asserting that a physical disability interferes with their ability to commute, or that they have an anxiety condition that limits their ability to engage in in-person interaction.

I had a few of those files coming out of the pandemic, of employees saying they're medically unable to return to the workplace, and they shouldn't have to because they've been able to fully do their job from home. Management often disagrees with the latter perspective: "No, there's an in-person component to the role and we had to scale back our operational ability to provide those services during the pandemic out of necessity, but we're trying to return to our pre-pandemic service levels and it's your job to do those tasks that can't be completed from home."

And as to the accommodation claim, management tends to be skeptical - and not entirely without reason. Especially when this is an individual who attended the office without issue pre-pandemic, the manifestation of a medical condition that prevents them from returning to the less-flexible in-person work...seems a bit convenient. However, employers are generally well-advised to shelve that skepticism, and to explore the disability claim in good faith. As I've highlighted before, employers are entitled to information about functional limitations necessary for accommodated work, and even when the disability is legitimate, they aren't necessarily bound to offer the employee's preferred accommodation.

A Few Rules

For an employer looking to bring remote workers back into the office, I think there are a few basic propositions:

• If the individual lives far away (e.g. well outside a reasonable commuting distance), and you either (a) hired them when they already lived there; (b) knew about, and acquiesced to, their relocation; or (c) failed to explicitly communicate an expectation that they may be recalled and they moved without knowing that this issue may arise, then you're probably sunk. You can never bring that person back, unless you explicitly got them to agree, as a condition of their relocation, to a written contract term allowing you to recall them on notice. (See Staley v. Squirrel Systems of Canada.)
• If the individual has childcare or other obligations making it difficult for them to return to the office, courts will expect employers and employees to collaborate to resolve those issues, including notice and flexibility by employers, and reasonable efforts by employees to make arrangements to address those obligations.
• If the employee was hired remotely and was never required to regularly attend at the office, unless there were clear communications at the point of hire that the employer reserved the right to change this, it will be more difficult to bring that worker into on-site work. A prolonged period of fully remote work, without clearly expressing that it is temporary and can be changed back, may also raise challenges for employers. It may be necessary, in some cases, to compensate employees for increased commute expenses.
• Incremental changes will generally be easier. Once you have employees regularly attending on-site at all, even if it's just a couple times per month, it will be relatively easy to gradually increase that expectation, if you choose to do so. Moving from full-time remote to full-time on-site, however, would be a stark change.
• It will be important to clearly set expectations, and ideally to give as much notice as possible for changing expectations. You might have different expectations for different types of roles, and should ensure that everyone understands what rules apply to them.
• Employers should shore up their accommodation policies and procedures before a return to the office. Ensure that you have the procedures in place so that when - not if - some employee says, "I have a disability that prevents me from working on-site", you'll have the tools to be able to properly evaluate that request.
• What does the contract and/or offer letter say about location of work? While employers are presumptively entitled to determine where work is completed, that entitlement can be limited by contract. So if the offer letter said it's WFH, without carving out a right to change that, that may be a problem.

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The author is an in-house lawyer in Alberta. Views are the author's alone. This article does not contain legal advice, but general legal information. If you have a legal issue, consult a lawyer.