The COVID-19 pandemic has generated immeasurable hurdles globally especially impacting employees at work and employers attempting to navigate a public health crisis. To combat the COVID-19 virus and to maintain health and safety, rules and regulations surrounding employment have been consistently evolving since March of 2020. Common ‘norms’ relating to the workplace environment, structure, habits, and schedule have all been forced to change during the course of the pandemic. One of the most transitional norms emphasized throughout the pandemic’s duration has been remote work.
HOW WORKING REMOTE HAS CHANGED EMPLOYMENT STRUCTURES
For many, remote work is now the new normal. Many organizations that can function fully remote have taken advantage of diminished business expenses such as office space or materials and resources. For other employers, remote work was simply a temporary phenomenon. While for some, it’s simply not possible to work from home (such as employees who work in retail stores, restaurants, hospitals, long-term care, customer service etc.). In these scenarios, when “work from home” orders were lifted and deemed safe, employees were required to return to their original working environment in person. Alternatively, some employers have taken on what society calls a hybrid model working structure, whereby employees are only required to come into the workplace 1-3 days per week and may even have flexibility in their schedule.
With remote and hybrid working structures in mind, the effects of these changes have resulted in employees moving out of congested residential areas, such as Toronto, into cities that are further away and typically cheaper in terms of housing costs. Statistics Canada revealed that throughout 2021, “Toronto experienced a loss of 50,375 as people moved to surrounding cities such as Oshawa, which experienced a population growth of 2.1 percent and Kitchener-Cambridge-Waterloo, up by two percent”. Remote and hybrid work structures facilitated this transition, demonstrating just how impactful employment is in shaping our lives.
Despite this, the lifting of restrictions across the country may leave employees who have been successfully working remote, directed back into the office as life is quickly returning to “normal”. Do they have to experience a lengthy commute? Can they refuse to return to the office?
WHAT DOES THE LAW REVEAL?
The Employment Standards Act prevents employees from experiencing dramatic changes relating to the fundamental terms of their employment. Or in other words, the act protects employees from experiencing unilateral changes in their employment. A “unilateral change” in employment can be described as an action that was done without the consent of the employee”. Examples of unilateral changes include, a reduction in hours and salary, geographical relocation, or a notable change in the roles and responsibilities of the employee. Unilateral changes in employment can frequently result in constructive dismissal claims.
What is meant by fundamental terms of employment? In the hiring stage, employment contracts are used to set out the fundamental terms of the employment relationship, including but not limited to entitlements, obligations, and restrictions of both parties. This may include conditions relating to salary, benefits, retirement, location of work, company policies, termination, and non-compete agreements. An important fundamental term relating to your working location is the presence of a mobility clause. The mobility clause empowers the employer to transfer the employee’s place of work to another geographical location.
But what if the employee is the one relocating?
With the liberty to work remote, employees have moved away from the workplace, and further employees have simply become accustomed to working from home. Providing opportunities to work in a way that better suits their lifestyle and needs. However, from an employer’s perspective, what does it mean when they want to direct employees back into the workplace?
From a legal standpoint, these questions spark curiosity relating to employers ordering employees back in person after years of working remote successfully. We at Sultan Lawyers break this down.
In certain circumstances, employees who have the right to work from home may adopt this as a fundamental term. The test in determining this is based on three questions:
- Was it clear that remote work was a temporary solution to an unanticipated problem?
- Is it arguable that it was a longer-term change? or
- Was there no clear communication at all?
In short, the longer an employee works from home and the lack of communication or a clear policy, the greater the chance an employee can claim “remote work” as a fundamental term of their employment. Thus, remote workers are better able to dispute that a “return to work order” is a unilateral and substantive change to a fundamental term of their employment and further, a change they do not have to accept.
Alternatively, it would be more difficult for an employee to dispute that a return-to-work order is a fundamental change to their employment if they were permitted to work from home for only a short duration during COVID-19 and were ordered back as soon as possible.
UNILATERAL CHANGES: FINDINGS IN COMMON LAW
Wronko v. Western Inventory Services Ltd. (April 29, 2008)
The Ontario Court of Appeal decision in Wronko v. Western Inventory Services Ltd. (April 29, 2008) provides guidance for employers who are looking to change fundamental terms in employment contracts.
In this case, an employer informed an employee of an imminent workplace change that was to be implemented two years in the future. The employee repeatedly rejected the change to the fundamental terms of their employment. We acknowledge the basic principle of contract law dictates that, to make changes within a contract, both parties must provide consent for it to be enforceable. Thus, the rejection from the employee required the employer to take additional steps to implement the change appropriately.
The Court of Appeal explained three options available to an employee when an employer imposes a unilateral change to a fundamental term of their employment:
- the employee may accept the change and the employment relationship will continue under the altered terms;
- the employee may reject the change and sue for damages if the employer treats the relationship as subject to the new term (this constitutes constructive dismissal); or
- the employee may clearly reject the new term, in which case, to implement the change, the employer must terminate the employee with proper notice and offer re-employment on the new fundamental terms.
The employer failed to provide notice of termination for rejection of the new modified term. Inevitably, the employee was constructively dismissed because the employer implemented a change to a fundamental term without:
- obtaining consent from the employee; and
- providing notice of termination for non-compliance.
The employee was awarded damages for constructive dismissal as well as anticipatory breach of contract.
Relating the above to remote work – If working from home is reasonably viewed as a fundamental term of employment if an employer terminates an employee for refusal to comply with the return order, this could constitute constructive dismissal in certain circumstances.
WAYS EMPLOYERS CAN AVOID RISK OF LIABILITY
In summary, the best way to mitigate this risk is through clear communication. Employers should indicate the progressive strategy moving forward, whether that is calling everyone back to the office, offering hybrid work, or allowing employees to continue working fully remote.
Further, we recommend that if an employer wants to make a fundamental change, the employer should provide proper notice specifying that refusal to accept the new term will result in termination. Following this, the employer can re-offer employment on the new fundamental terms.
CONTACT SULTAN LAWYERS FOR MORE INFORMATION
We encourage you to contact Toronto employment lawyers, Sultan Lawyers, for a free call back or flat-rate consultation to understand your rights and the options available to you in relation to bonus entitlements for terminated employees. Please contact us by telephone at 416-214-5111 or here.