Is Your Home Office A Fundamental Term Of Employment?

As the commute in and around the Greater Toronto Area grows more time-consuming and, in turn, more expensive, more employees are taking advantage of the opportunity to work remotely. Many of them also have the added benefit of working from home.

For those who enjoy this benefit, I would be surprised if they were to say that they did not consider the ability to work from home to be a fundamental term of employment. In some cases, the ability to work from a home office is explicitly set out in the employment agreement. However, quite often, this kind of work arrangement is simply the result of a verbal agreement between the employee and the supervisor.

How would you feel if you had the benefit of working from home for many years, only to have your employer tell you that you are no longer able to do so and must work from the head office instead? If the commute to the head office is 30 minutes or less, some employees might not find this to be a major concern. If, however, the commute requires hours of travelling through rush hour traffic, most employees would find this to be a significant change to the terms of employment.

As an employment lawyer, the question that comes to my mind is, “Does this constitute a constructive dismissal?” This is an issue that the Ontario Superior Court of Justice tackled in Hagholm v. Coreio Inc.

In this decision, the plaintiff employee worked for 22 years with the defendant employer and its predecessor, three days a week at home and two days a week in the head office. Not long after the employer informed the employee that she could no longer work from home, she resigned and sued the employer for constructive dismissal. In other words, the employee claimed that the employer unilaterally altered a fundamental term of her employment agreement.

Although there were other factors involved in the determination of this case, the court considered the biggest factor to be the removal of the employee’s ability to work from home. In reviewing the evidence, the court noted the following considerations:

  1. The employee would have to drive the “incredibly busy 401 highway” in both directions;
  2. The traffic volumes would likely add approximately three hours to the employee’s working day;
  3. Due to the volume of car and large truck traffic on the highway and the speed with which the traffic moves, the highway would be “a dangerous road to spend a lot of time on”;
  4. The employee would also incur a significant cost in operating a vehicle each day for 220 km.

The court noted that the facts of the case were not seriously in dispute. This permitted the court to make a finding that the employee had been permitted to work from home for roughly 22 years and that this was an essential term of her employment. The court went on to conclude that the employer unilaterally breached this term, thereby constructively dismissing the employee. In assessing the employee’s damages, the court based its award on a notice period of 22 months.

For employers, one takeaway from this case is that it is important to have the employee confirm in writing that permission to work from home may be subject to change, and that such a change will not constitute a constructive dismissal. For employees, it is important to note that, in the absence of such written confirmation, the ability to work from home can be an essential term of employment that cannot easily be changed without adequate notice or pay in lieu thereof.

This article is intended only to provide general information and does not constitute legal advice. Should you require advice specific to your situation, please feel free to contact me to discuss the matter further.