The Risk of Long-Term Remote Work Arrangements

Constructive Dismissal | Employment Contracts | Policies and Procedures

Some or all of your employees have been working remotely since March of 2020. You are finally allowed to resume normal operations, so you direct those who have been working from home to return to the workplace in two weeks, but some of them refuse. They are stating that they prefer to continue working from home and have been effectively doing so for well over a year.

Can you insist they return to the workplace? What if they have moved far away, assuming they would be able to continue working remotely?

As is often the case, the answer is “it depends”. But in this scenario, the answer may change as time goes on.

We know that employers cannot unilaterally make substantial changes to the fundamental terms of the employment relationship; removing an employee’s right to work from home would certainly fit that description. The question will really come down to:

  • Whether the employee had the right to work from home, and
  • Whether the employer has the right to remove that right.

Does the Employee have a Right to Work Remotely?

When assessing the rights and obligations of the parties, we usually start by examining the employment contract. If it explicitly allows the employee to work from home, or choose where to work from, then that issue would be very clear. However, even if the employment contract does not state this specifically, there may be more to consider.

Often, past practice will be relied upon to assess the contractual rights of the parties in cases where the contract is silent on an issue. In “normal” times, if an employee was consistently allowed to work from home, and their contract was silent on the point, then the employee could rightfully assert that they had the right to continue doing so and that removing that right is a constructive dismissal.

Similarly, courts have also been receptive to the argument that if an individual employee routinely receives bonus payments, then bonus payments effectively become a part of their compensation package. When employers try to change these practices, the employee can allege that there has been a unilateral and substantial change to a fundamental term of their contract, which is the definition of constructive dismissal.

What about employees who have been working remotely through the pandemic?

Initially, most organizations scrambled to figure out how to continue operating with their workers at home. People set up their personal laptops on their dining room tables and just made the best of the COVID-19 pandemic situation, hoping that it would be a short-term situation and that life would get back to normal quickly. And if all had occurred as we hoped, it would be inconceivable that the brief and unexpected period of remote work would establish a legal right.

However, we are now over 14 months in.

What will work arrangements look like after the pandemic is over?

There is plenty of debate regarding what the future of work will look like. I think it’s reasonable to assume that not everything will go back to the way it was pre-pandemic. There will be employers who will adopt remote work as the new norm, where they can benefit from dramatic cost savings, and without any apparent loss of productivity.

Other employers, such as ones who operate retail outlets, will have to return to the way things were before the pandemic. You just can’t sell a t-shirt or a hamburger from your home office. However, the administrative roles in those organizations can be performed remotely, either entirely or partially. Some organizations will likely adopt a hybrid model and allow their employees to work from remote locations for at least part of their work week.

Potential For Creating a Unilateral and Substantive Change Post-Pandemic

Either way, this will represent a change, both from the way things were before the pandemic and the way things have been for employees that have been working entirely from home. Could those employees argue that any requirements that they return to the physical workplace – even for part of the week – would constitute a unilateral and substantive change to a fundamental term of their employment and that is a change they do not have to accept?

The longer an employee is permitted to work from home – particularly if there was an option to bring them back sooner – the greater the risk of a finding that the ability to work from home has become a fundamental term of the employment relationship. It is harder to dispute that fact when the employer has willingly allowed the employee to work remotely for a long time, as opposed to being forced to for a brief period.

A court faced with this issue will ultimately consider any communications regarding the remote work arrangement.

  • Was it clear that this was a temporary solution to an unanticipated problem, or
  • Is it arguable that it was portrayed as a longer-term change, or
  • Was there no clear communication at all?

If there was no clear communication at all, and if it was not necessary for employees to work from home, then the fact that they were allowed to continue to do so could be seen as a fundamental change.

Mitigating the Risks of Creating a Fundamental Change in the Employment Arrangement

The best way to mitigate this risk is through clear communication. As time elapses, organizations would be well advised to ensure that there is a clear record which confirms that employees who are still working from home should not assume that this will continue forever or that they will have the choice as to where they work in the future.

We always say that most cases are fact-specific, and that is particularly true when discussing the issue of remote work arrangements. There may be clear contractual terms or policies already in place that establish where an employee will work. However, the reality is that most employers do not have such clear terms in place. As a result, the longer that an employee is allowed to continue working remotely, the greater the chance that they will claim some right to do so going forward. The best way to refute that is through clear documentation.

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