British Columbia Court of Appeal Recognizes Remote Work as Potential Employment Condition

Introduction

In Cressey Construction Corporation v Parolin, 2026 BCCA 199,[1] the British Columbia Court of Appeal upheld a trial decision finding that a longtime employee had been constructively dismissed after her employer required her to return to the office full-time and effectively disregarded a longstanding remote-work arrangement.

The decision highlights how informal workplace arrangements can become binding employment terms and the risks of changing them without notice.

Background

Tracy Parolin (“Ms. Parolin”) worked for Cressey Construction Corporation (“Cressey”) for approximately 18 years. She began her employment in 2005 as a Development Manager and was promoted to Director of Marketing in 2018.

Ms. Parolin's employment was not governed by a comprehensive written employment agreement. Other than a written job description for her Director of Marketing position, the terms of her employment were largely oral.

Following the birth of her twins in 2012, including one with significant health concerns, Ms. Parolin returned from maternity leave on a flexible work schedule that accommodated her childcare responsibilities. Over time, Cressey approved and supported these flexible arrangements.

During the COVID-19 pandemic, she began working remotely and continued to do so with management's knowledge and approval after other employees returned to the office. In 2021, she confirmed the arrangement with a senior executive, who advised her that as long as her work was being completed, her physical location did not matter.

In May 2023, Ms. Parolin met with her supervisor to discuss a salary increase she had been seeking since her promotion to Director of Marketing. During that meeting, she was informed she would receive only a modest salary increase. Cressey advised Ms. Parolin that her role was more similar to a Marketing Manager than a Director of Marketing and directed her to return to the office full-time. Ms. Parolin treated the changes as a constructive dismissal and commenced an action against Cressey.

Trial Decision

In Parolin v Cressey Construction Corporation, 2025 BCSC 741,[2] the trial judge found that Ms. Parolin’s flexible work arrangements, including her ability to work from home, had become oral terms of her employment contract. Cressey had knowingly permitted and supported these arrangements for many years and Ms. Parolin had relied upon them in balancing her work and childcare obligations. As a result, those arrangements could not be unilaterally altered without reasonable notice.

The trial judge further found that the combined effect of the return-to-office directive, the modest salary increase, and comments suggesting Ms. Parolin’s role was more akin to a Marketing Manager, amounted to a substantial change in the terms of her employment. The Court therefore held that Ms. Parolin had been constructively dismissed and awarded damages based on a 19-month notice period.

The Court of Appeal Decision

(a) Constructive Dismissal

The Court of Appeal upheld the trial judge’s decision and dismissed Cressey’s appeal. In reaching its conclusion, the Court of Appeal cited the Supreme Court of Canada's decision in Potter v New Brunswick Legal Aid Services Commission, 2015 SCC 10, which recognizes two branches of constructive dismissal:

1. Fundamental change to an essential term – where an employer unilaterally breaches an express or implied term of the employment contract, resulting in a substantial change to an essential term of employment; and
2. Series of acts – where the employer's conduct, viewed cumulatively, demonstrates an intention to no longer be bound by the employment contract.[3]

Applying Potter, the Court held that Ms. Parolin’s ability to work from home was an oral term of her employment contract. Although the arrangement was not contained in a formal written agreement, the parties’ words and conduct demonstrated an objective intention that it form part of the employment relationship. The Court noted that Ms. Parolin had requested permission to work remotely and that Cressey had approved and supported the arrangement for nearly three years.

The Court held that the return-to-office directive constituted a substantial change to an essential term of Ms. Parolin's employment and, on its own, was sufficient to establish constructive dismissal. The Court noted that nothing in Ms. Parolin's employment contract entitled Cressey to make this change without notice, and Ms. Parolin did not consent to it. Given the significant impact on her childcare arrangements and her ability to balance those responsibilities with full-time work, a reasonable person in Ms. Parolin's circumstances would have viewed the directive as a substantial change to the employment relationship.

The Court also noted that the employer's conduct surrounding the May 2023 meeting could support a finding that it no longer intended to be bound by the employment relationship under the second branch of Potter.

(b) Mitigation

The Court of Appeal upheld the trial judge's conclusion that Ms. Parolin did not fail to mitigate her damages. Following her constructive dismissal, Ms. Parolin pursued several business ventures related to her professional experience. The Court held that in appropriate circumstances, entrepreneurship may constitute reasonable mitigation. Given Ms. Parolin's extensive industry experience and significant efforts to develop those ventures, her mitigation efforts were reasonable in the circumstances.

The Court also found that Cressey had failed to establish that comparable employment was available. The positions relied upon by Cressey primarily required in-office work and were inconsistent with the work-from-home arrangement.

Takeaways

This decision confirms that workplace arrangements may become enforceable terms of employment through the parties' conduct. Employers should clearly communicate and document whether remote-work arrangements are temporary or subject to change. Relying on the assumption that employees will eventually return to the office may create legal risk.

Employers should also exercise caution before making significant changes to established working arrangements, as reasonable notice may be required to avoid constructive dismissal.

If you have questions about the topic discussed above, or any other employment matters, please connect with the authors or our Labour and Employment team.