While the COVID-19 pandemic may be a distant memory for some, employers across Canada continue to face the realities of informal work-from-home policies and attempting to return employees to the workplace. In Cressey Construction Corporation v. Parolin, 2025 BCCA 255 (Cressy), the British Columbia Court of Appeal recently dealt with this issue. In Cressy, an employer’s sudden decision to insist an employee return to the office after years of working from home resulted in a constructive dismissal that had significant financial and legal ramifications.
Background
Tracy Parolin started working at Cressey Construction Corporation in 2005 as a Development Manager and was eventually promoted to Director of Marketing in April 2018. In June 2012, Ms. Parolin gave birth to twins, one of whom had significant health issues. Once her children started kindergarten in 2017, she was given flexibility to pick up and drop off her children five days a week, and her work schedule was approximately 8:45 a.m. to 2:15 p.m., ending work significantly earlier than her colleagues.
At the onset of the pandemic in 2020, the Company allowed for their employees to work from home. When deemed safe, the employees returned to the office. However, Ms. Parolin did not, citing her child’s health and childcare responsibilities. She received informal but express verbal approval from two successive supervisors to continue to work from home, and she did.
In March 2023, Ms. Parolin met with the Company’s Vice President of Development to discuss a pay increase she had been seeking since her promotion. During this meeting Ms. Parolin was told that she would receive a very modest salary increase, which was far below her expectations, as the Company deemed her position to be more akin to a Marketing Manager. The Company also directed Ms. Parolin to return to in-office full-time work, without notice. She took the position she was constructively dismissed from her employment and left the Company on May 17, 2023.
Trial judgement
The trial judge found Ms. Parolin’s work-from-home arrangement to be an enforceable and express term of her employment contract, supported by years of Company approval. Simply put, Ms. Parolin sought permission to work from home and the Company agreed. Ms. Parolin then worked from home for three full years. In the circumstances, the Court determined that fresh consideration was required to support the return-to-work policy, and as such, Ms. Parolin was deemed to have been constructively dismissed.
Appeal
The Company appealed the decision and argued that a determination of constructive dismissal required both a breach of an essential term and a demotion. This argument was rejected by the Court of Appeal. The Court stated that the Company’s sudden introduction of a return-to-work policy was a change of an essential term. Additionally, the Court determined that her role and its associated salary were inconsistent with what it should have been. Furthermore, the Court disagreed with the Company’s argument that Ms. Parolin had failed to mitigate her losses by not looking for similar employment. The Court found Ms. Parolin’s efforts to start several businesses were reasonable efforts to mitigate her losses.
The Court upheld the trial judge’s award to Ms. Parolin of 19 months’ pay in lieu of notice, which was based on Parolin’s age, her 18-year length of employment and her Director-level role.
Key takeaways:
- The employer’s conduct can create a binding term of employment. Although an informal remote work arrangement is not automatically a contractual entitlement, it can become one through words and conduct. The “status quo” can change over time, despite terms not being written down.
- Documentation is key. Ms. Parolin’s claim would have been significantly weakened, if not extinguished, had clear written terms accompanied the years of supervisor approval. Employers are advised to ensure all terms of employment are written down and agreed to especially if they are meant to be temporary or at the employer’s discretion.
- Reasonable notice of changes. Once the Court determined that the right to work from home was an essential term of Ms. Parolin’s employment, the Company could not change it without notice. As a result, where an employer wishes to make a change to its employee’s terms of employment, it must provide reasonable notice or risk a complaint of constructive dismissal.
While the details of this case provide many distinguishable features, it stands as a reminder to Canadian employers to be mindful of verbal agreements and to document the same. Ms. Parolin’s case provides a cautionary example of the effects of informal agreements and the pitfalls of hasty policy implementation.
At Dentons, we can help in drafting agreements and policies that can mitigate claims like this. If you have any questions or would like to discuss, please contact the authors, Allison Buchanan and Anil Nair.
