As employers continue to navigate hybrid and return-to-office strategies, a recent decision of the British Columbia Court of Appeal confirms that a remote work arrangement can, in some circumstances, become an enforceable contractual term – even if the employer initially intended it to be temporary or informal.
In Cressey Construction Corporation v Parolin,[1] the Court of Appeal held an employee’s informal work-from-home arrangement was an essential oral term of her employment contract. As a result, when her employer required her to return to the office without reasonable notice, this amounted to constructive dismissal, and the employee was awarded 19 months’ reasonable notice.
Fortunately for employers, if properly documented and managed, a remote work arrangement can remain temporary, and at the discretion of an employer.
What Happened in Cressey Construction?
Tracy Parolin was the Director of Marketing for Cressey Construction Corporation, with 18 years’ service. The terms of Parolin’s employment agreement were mostly oral.
In 2013, when Parolin returned from maternity leave, she was given flexibility in her work hours to accommodate childcare. This arrangement continued for several years, until the onset of the COVID-19 pandemic, when Parolin and her co-workers began exclusively working from home. When her co-workers returned to the office in June 2020, Parolin continued to work from home due to her child’s health concerns. At the time, Parolin was told by Cressey, “as long as the job was getting done, it did not matter where she worked.” Cressey assumed Parolin would return to the office when the pandemic ended. However, it did not communicate this expectation to her.
In March 2023, Cressey asked Parolin to return to work in-person. At this point, she had worked flexibly for ten years, including remotely for three years. Parolin did not wish to return to the office and took the position the requirement that she do so was a “constructive dismissal.”[2]
At trial, the judge found Parolin’s flexible work hours and work location were oral terms of her employment contract which could only be changed with “reasonable discussion and/or notice.” As such, Cressey unilaterally requiring that Parolin return to the office established constructive dismissal:
I have concluded that a term of Ms. Parolin’s employment contract was her ability to work flexible hours at home, due to childcare commitments. This term was not indefinite, as it was tied to childcare commitments. While I accept that employers have the ability to manage their workforce, including the location of work, that is tempered where a binding term in an employment contract exists. In this case, while the term of flexible hours and location in employment contract is oral, I have concluded it exists, and thus can only be changed with reasonable discussion and/or notice. There is no question that Cressey knew of Ms. Parolin’s flexible work arrangement, which she had for ten years, and her work from home arrangement, which she had for three years. The defendant authorized this, knew it existed, and supported it over that time. I have therefore found Ms. Parolin’s flexible work hours and location to be oral terms in her contract of employment, as set out above.[3]
The British Columbia Court of Appeal agreed.
Key Takeaways and Best Practices
The decision makes clear an informal agreement to allow an employee to work remotely can, in certain circumstances, evolve into a binding contractual term, particularly if:
- Remote work continues for a significant period of time, and
- The employer does not clearly communicate the remote work arrangement is temporary, discretionary, or subject to change.
To reduce the risk of a constructive dismissal when changing a remote work arrangement, consider the following best practices:
- An employment agreement should be written (remember – an employment agreement that is not written down is worth the paper on which it’s written…).
- An employment agreement should expressly identify the work location, whether any remote work arrangement is temporary, that the employer can require the employee to return to the office, and that doing so does not constitute constructive dismissal.
- Have a remote work policy, which addresses location and hours of work and is regularly updated and made known to employees.
- Distinguish between a discretionary remote work arrangement and a remote work arrangement provided as part of the employer’s duty to accommodate.
- Train managers how to communicate accurately and effectively about a remote work arrangement or policy, including the employer’s expectations. For example, avoid statements such as “you can work from home as long as the work gets done.”
- Before implementing a return-to-office mandate:
- Review every existing remote work arrangement or policy, written or oral, formal or informal, and consider:
- Is the arrangement truly discretionary?
- Could it have evolved into a contractual entitlement?
- If so, what is the most effective way to bring the employee back to the office while minimizing the risk of a constructive dismissal?
- Is there is an accommodation or human rights related obligation which must be considered?
- Review every existing remote work arrangement or policy, written or oral, formal or informal, and consider:
In every case, plan the transition carefully, with the advice of experienced employment counsel.
To learn more and for assistance, contact your Sherrard Kuzz LLP lawyer or info@sherrardkuzz.com.
Sarah MacKay Marton is a lawyer with Sherrard Kuzz LLP, one of Canada’s leading employment and labour law firms, representing employers. Sarah can be reached at 416.603.0700 (Main), 416.420.0738 (24 Hour) or by visiting www.sherrardkuzz.com.
The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice, nor does accessing this information create a lawyer-client relationship. This article is current as of July 2026 and applies only to Ontario, Canada, or such other laws of Canada as expressly indicated. Information about the law is checked for legal accuracy as at the date the presentation/article is prepared but may become outdated as laws or policies change. For clarification or for legal or other professional assistance please contact Sherrard Kuzz LLP.
[2] Constructive dismissal can occur when an employer makes a unilateral, fundamental change, to an essential term of employment.
[3] Emphasis added by the British Columbia Court of Appeal.
