In Parolin v. Cressey Construction Corporation, 2025 BCSC 741, Ms. Parolin was an 18-year employee of a Vancouver real estate development and construction company, Cressey. She joined the company in 2005, and by 2018, as Director of Marketing, she earned $93,600, with promises of further salary increases.
Ms. Parolin had a flexible work schedule since 2013 in view of her parenting responsibilities. During COVID, Ms. Parolin also worked from home and helped her children with remote schooling. That arrangement continued after the pandemic. The company told her that it did not matter where she worked, as long as she got the job done.
In 2023, Cressey cancelled Ms. Parolin’s flexible work arrangement without notice. Ms. Parolin argued that she was constructively dismissed, and sued Cressey for breach of contract.
Ms. Parolin prevailed in court. The judge agreed that she was wrongfully (constructively) dismissed, awarding $148,200 in damages, setting the notice period at 19 months.
Flexible and remote work
In March 2020, BC declared a public health emergency due to the COVID-19 pandemic. Cressey allowed its head office employees, including Ms. Parolin, to work remotely. When other employees returned to the office, about two months later, the company agreed that Ms. Parolin could continue to work from home. Ms. Parolin advised the company, in 2021, that one of her daughters had health concerns, and needed supervision at home.
When Ms. Parolin returned from maternity leave, the company agreed that she could work on a flexible schedule to accommodate her childcare responsibilities. Ms. Parolin would inform the company of the hours she was able to work for an upcoming period, and the company would approve those hours.
Return to office and implied contractual terms
An employer is generally entitled to direct an employee to work in a specified location, such as the employer’s office, and may terminate that employee for cause if the employee refuses an order to return to the office. However, if the employment contract contains express or implied terms allowing an employee to work remotely, then an employer cannot order that employee to return to the office, without first giving notice.
Absent a written agreement, the parties’ conduct can result in implied contractual terms. Also, essential terms of an employment contract may be verbal.
The judge ruled that a flexible work schedule, including remote work, had become a term of Ms. Parolin’s employment contract.
The judge reached that conclusion, in part, by finding that the company had agreed on multiple occasions, since 2013, that Ms. Parolin:
- could work flexible hours; and
- after COVID-19, could work remotely.
The judge also looked at the employer’s conduct, including:
- telling Ms. Parolin, when offering her the marketing director position in 2018, that the position was a good fit because she could succeed in it with her flexible work schedule;
- telling Ms. Parolin in 2021, when her daughters were attending school remotely due to the COVID-19 pandemic, that her work location did not matter as long as she got her work done; and
- agreeing in 2021 that Ms. Parolin could set up a home office and purchase her own equipment to use at home for work duties.
Constructive dismissal
The test for constructive dismissal in Canada is:
- Was there a unilateral change by the employer that amounts to a breach of the employment contract? Has the employer substantially altered a fundamental or essential term of the contract?
- Did the employer engage in a course of conduct that, when viewed in light of all the circumstances, would lead a reasonable person to conclude that the employer no longer intended to be bound by the terms of the contract?
In 2023, Ms. Parolin asked for a raise to $130,000, in line with industry competitors. Cressey, without notice, told her that her job duties were more comparable to those of a low-level marketing manager, offered her a $1,400 raise to $95,000, and importantly, ordered her to return to the office on a regular 9-to-5 schedule. Cressey tried to justify the less than generous raise by claiming that her job duties were comparable to those of a low-level manager.
The company had argued that:
- Ms. Parolin’s contract did not entitle her to the title of Director of Marketing; and
- even if the court found that the company changed her job title, it did not constructively dismiss her, since it had not made substantial changes to terms of employment, such as reductions to Ms. Parolin’s salary or job responsibilities.
The court found that Ms. Parolin had performed all the duties of Director of Marketing since 2018. The court ruled that the company implicitly demoted her to marketing manager in the 2023 meeting, by offering her a salary increase in line with that of a marketing manager rather than a Director of Marketing.
Further, the company unilaterally breached an implied term of Ms. Parolin’s employment contract by cancelling her flexible work arrangement without notice. These acts showed that the company no longer intended to be bound by the terms of its employment contract with Ms. Parolin, constructively dismissing her.
Punitive damages
Ms. Parolin argued that the company concocted a plan to force her to quit. Company executives made derisive remarks about her missing meetings due to childcare duties, and told her she wasn’t included in events because she was a woman. At the 2023 meeting during which Ms. Parolin’s flexible work arrangement was cancelled, the company pointed to a male coworker with children who still worked regular hours at the office.
The court found that while the company had treated Ms. Parolin poorly, and there was evidence of bad faith conduct, there was insufficient evidence that the company was malicious and oppressive, rather than merely careless and dismissive, in its treatment and constructive dismissal of Ms. Parolin. The court declined to award punitive damages.
Conclusion
While employers are generally allowed to order remote-working employees to return to the office, long-standing flexible and remote work arrangements may become implied terms of an employment contract. Under such arrangements, a return-to-office mandate without reasonable notice can constitute constructive dismissal.
With the rise in recent years in return to office mandates, employers must be careful with how they implement such mandates. Many employees have worked under long-standing remote, hybrid, and other flexible work arrangements in the past five and a half years since the COVID-19 pandemic began. Courts may find that these arrangements become terms of those employees’ contracts.
It would be prudent for an employer to carefully review the circumstances of an employee’s remote or flexible work arrangement, and provide proper notice, before ordering that employee to return to the office.
Link to decision:
https://www.canlii.org/en/bc/bcsc/doc/2025/2025bcsc741/2025bcsc741.html
