How (Not) to Manage Risk When Changing Remote Work Arrangements - The Cressey v. Parolin Ruling

The British Columbia Court of Appeal’s decision in Cressey Construction Corporation v. Parolin, 2026 BCCA 199 provides important guidance for employers navigating return-to-office mandates. The Court confirmed that a long-standing work-from-home arrangement can become an essential term of employment, and that revoking it without reasonable notice may constitute constructive dismissal.

Key Takeaways for Employers:

• Remote work arrangements can become essential terms of employment: Consistent, employer-approved remote arrangements may be deemed enforceable essential terms of employment, even if they are not in writing.
• Return-to-office mandates require care: Mandating return to the office requirements without notice after long-term remote work arrangements may trigger constructive dismissal.

One essential change is enough: A single unilateral change to work location alone, if deemed an essential term of employment, can constitute a constructive dismissal – even without a pay cut or demotion.

Background 

Tracy Parolin worked for Cressey Construction Corporation for approximately 18 years and became Director of Marketing in 2018. Her employment relationship was largely governed by an oral agreement, supplemented by a written job description. After returning from maternity leave in 2013, Ms. Parolin worked reduced and flexible hours to meet childcare needs, with the employer’s approval. During COVID-19, she transitioned to remote work and - unlike her colleagues who returned in June 2020 - continued working from home due to childcare and health considerations, again with employer support. By March 2023, she was working full-time remotely with an established home office.

In May 2023, Ms. Parolin received a modest raise from $93,600 to $95,000, which was below expectations for her Director-level role. At the same time, the Vice President advised that her duties were more aligned with a “Marketing Manager” position and directed her to return to the office full-time (Monday to Friday, 9:00 a.m. to 5:00 p.m.). Ms. Parolin treated this as a constructive dismissal and ceased working. Following her departure from Cressey, Ms. Parolin did not seek traditional alternative employment. Instead, she began working on several entrepreneurial business ventures, and by the time of trial, these ventures had not yet generated any revenue.

Trial Decision

In Parolin v. Cressey Construction Corporation, 2025 BCSC 741, the trial judge found that flexible hours and remote work were oral terms of Ms. Parolin’s employment contract. The combined effect of the return-to-work mandate without notice, the minimal salary increase and the suggestion Ms. Parolin’s role aligned with a lower-level marketing position amounted to a demotion. This demotion, along with the unilateral change in essential terms of her employment contract, were sufficient to establish a breach of Ms. Parolin’s employment contract and ultimately her constructive dismissal. The trial judge awarded Ms. Parolin 19 months’ pay in lieu of notice and also concluded she had reasonably mitigated her losses despite pursuing entrepreneurial ventures rather than traditional employment.

Court of Appeal Decision

The Court of Appeal upheld the trial decision and dismissed the appeal, affirming that Cressey’s actions amounted to constructive dismissal. The Supreme Court of Canada in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, established that constructive dismissal can take two forms. The first involves a single unilateral act that breaches an essential term of the employment contract. The second form involves a series of acts that, taken together, show that the employer no longer intended to be bound by the employment contract. The inquiry is highly fact-specific, and satisfaction of either of the two forms is sufficient for finding constructive dismissal. While the trial judge found constructive dismissal under both forms, the Court of Appeal held that it was sufficient to find a breach under the first form alone, based solely on Cressey’s unilateral direction requiring Ms. Parolin to return to full-time in-office work, without reasonable notice. The Court of Appeal made the following key findings.

• Work-from-Home Arrangement Became an Essential Term: Ms. Parolin’s remote work arrangement was an express oral term of her employment. Cressey was aware of Ms. Parolin’s childcare responsibilities, and Ms. Parolin had been working from home with Cressey’s approval for approximately three years. When Cressey ordered Ms. Parolin to return to in-office work without reasonable notice, Ms. Parolin did not consent or acquiesce to the change. Therefore, there was a unilateral breach. Cressey could have communicated in writing at the time Ms. Parolin went to work at home that the duration of remote work would be limited, and it expected her to return to the office after child-care accommodation was no longer necessary, however, it did not.  Cressey also could have provided Ms. Parolin with reasonable notice of the change to this essential term, but it did not.
  

• A Single Unilateral Breach Amounted to Constructive Dismissal: Requiring Ms. Parolin to return to the office full-time without reasonable notice was a substantial unilateral change to an essential term of her employment contract. This alone was sufficient to establish constructive dismissal.
  

• Pursuing Entrepreneurial Ventures Does Not Amount to Failure to Mitigate: On termination (whether constructive or otherwise), employees have an obligation to act in their own best interests, which includes an obligation to seek alternative income. Ms. Parolin’s decision to pursue several entrepreneurial business ventures was reasonable, given her experience and personal constraints in seeking traditional in-office employment. This did not amount to a failure to mitigate.
  

Conclusion

Parolin underscores that workplace flexibility, once established, can carry legal protection. As organizations continue refining hybrid strategies, employers should ensure they clearly define and manage remote work arrangements and implement any changes carefully and with reasonable notice to avoid future costly disputes.