Key Takeaways
Remote work arrangements may become binding terms of employment when they are applied consistently and relied on by employees. Changes to work location can therefore give rise to a constructive dismissal claim, similar to what can occur when an employer changes compensation or duties. While the outcome in any given case will depend on the specific facts, employers should assess whether flexibility has become part of the employment agreement and, if so, implement changes through agreement or reasonable notice rather than unilaterally to correct this situation.
In Cressey Construction Corporation v. Parolin, 2026 BCCA 199, the British Columbia Court of Appeal considered when a return‑to‑office requirement may cross the line into constructive dismissal. The decision underscores a familiar point for employers: changes to working conditions are often permissible, but greater care is required where those conditions have become established terms of the employment relationship.
Background
Ms. Parolin was a long-serving employee, having worked for Cressey for approximately 18 years and ultimately serving as Director of Marketing. Her employment terms were largely unwritten and developed over time through the parties’ conduct to become an implied contractual right.
Following maternity leave, she worked flexible hours to accommodate her childcare responsibilities. During the COVID-19 pandemic, she transitioned to remote work and, with the employer’s knowledge and support, continued working from home after other employees returned to the office.
In May 2023, during a meeting regarding compensation, the employer directed Ms. Parolin to return to full-time, in-office work and advised that she would receive only a modest salary increase, which fell well below her expectations. The employer explained that her role was more comparable to that of a marketing manager than a marketing director. Ms. Parolin treated this as constructive dismissal and resigned. The trial judge agreed and awarded 19 months’ reasonable notice, which the Court of Appeal upheld.
Remote Work as a Contractual Term
The Court found that Ms. Parolin’s ability to work from home had become an essential term of her employment contract, despite not being set out in writing.
The Court applied the two-step framework developed by the Supreme Court of Canada in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10 which asks:
- Whether the employer unilaterally breached the employment contract; and
- Whether that breach substantially altered an essential term of the contract.
Step 1: Unilateral Breach
The first question is whether the employer had the right to make the change. If the contract permits the change, or the employee agrees to it, there is no breach.
Here, the Court found that requiring Ms. Parolin to return to the office full-time was a unilateral change. Her employment agreement did not permit the employer to alter her work location in this way without notice, and she did not consent to the change.
Step 2: Substantial Change to an Essential Term of the Employment Agreement
The second step focuses on the seriousness of the change. The question is objective: would a reasonable person in the employee’s position view the change as substantially altering the contract?
The Court concluded that this threshold was met. Ms. Parolin had worked from home for approximately three years, and that arrangement was closely tied to her ability to manage childcare responsibilities. Removing it would have had a material impact on her working conditions.
On that basis, the change was not merely administrative as it went to an essential term of the employment relationship.
It bears mentioning that the Court’s analysis turned closely on the specific circumstances of the matter. This was not a case involving a temporary or clearly discretionary remote work arrangement. Rather, the arrangement was:
- longstanding;
- consistently applied; and
- supported by the employer over time.
The decision reflects a fact-driven application of constructive dismissal principles, rather than a broad rule about return-to-office policies.
Mitigation
The Court upheld the finding that Ms. Parolin reasonably mitigated her losses by pursuing business ventures rather than seeking alternative employment. The decision reinforces that mitigation is assessed contextually, and that self-employment may be a reasonable course of action, especially if it aligns with the employee’s experience and circumstances.
What This Means for Employers
This decision reinforces how constructive dismissal principles apply to evolving workplace arrangements. A change in work location, particularly where it has become embedded in the employment relationship, may constitute a unilateral and substantial change to an essential term of employment. In those circumstances, even a single change can be sufficient to support a constructive dismissal claim.
At the same time, the outcome remains highly fact specific. The duration of the arrangement, the employer’s conduct, and the extent to which the employee relied on the arrangement will all be central to the analysis. As such, the decision should not be read as limiting employers’ ability to implement return‑to‑office policies generally, but as a reminder that these changes must be assessed and implemented considering the particular circumstances of the employment relationship.