Employers in Ontario are increasingly requiring employees to make more frequent appearances at the office after years of remote or hybrid work. Have courts provided any recent guidance on whether return-to-office (“RTO”) mandates may constitute constructive dismissal? What instructive findings can employers take away from these decisions as they recalibrate their workplace models? This article provides a refresher on the constructive dismissal doctrine and explores developments on permissible RTO measures.
The case law illustrates that courts are resolving RTO disputes by applying the constructive dismissal framework from the Supreme Court of Canada’s decisions in Farber v. Royal Trust Co, [1997] 1 SCR 846 and Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, to the realities of the modern workplace. Two Ontario decisions, Hagholm v. Coreio Innc., 2017 ONSC 7713, and Byrd v. Welcome Home Children’s Residence Inc., 2024 CarswellOnt 21744 (Ont Sup Ct J, Small Claims), explain how remote or hybrid work can be an essential term of employment, whether by express agreement or through consistent practice. These cases further demonstrate that employers who unilaterally revoke such arrangements without reasonable notice risk constructive dismissal of affected employees. Cases reviewed in other Canadian common law jurisdictions reinforce a similar principle.
Legal Framework
Farber explains that a constructive dismissal arises when an employer unilaterally imposes a fundamental change to an essential term of employment without providing reasonable notice. This has the effect of repudiating the employment contract.
Potter refined the analysis into two distinct but overlapping branches. Under the first branch, the court must determine objectively whether a breach occurred by ascertaining whether the employer unilaterally changed the contract. If an express or an implied term provides the employer the authority to make the change, or if the employee consents to or acquiesces in it, the change is not unilateral and will not constitute a breach. The court then asks whether the breach was substantial from the perspective of a reasonable person. Under the second branch, the court examines whether the employer’s course of conduct would lead a reasonable person to conclude that the employer no longer intended to be bound by the employment contract. Both branches require a fact-specific inquiry.
Findings of Constructive Dismissal in Ontario
Hagholm v. Coreio Inc.
This case offers some insight into how Ontario courts view hybrid working arrangements. The Ontario Superior Court of Justice held that a hybrid arrangement allowing the plaintiff to work from home three days per week for more than two decades constituted an essential term of her employment. Therefore, the defendant’s unilateral requirement that she attend the office full-time breached that essential term.
As always, context is key. The plaintiff initially quit her job at the defendant employer in 1992 when she moved to Waterloo, Ontario. The defendant’s Vice President recruited her to return on a temporary basis and, in 1995, persuaded her to accept a full-time offer by granting the hybrid work arrangement. For the next 22 years, the plaintiff worked three days a week at home and two days a week at the defendant’s offices. Critically, there was no written term that documented either the arrangement or the defendant’s right to recall the plaintiff to the office.
The Court focused on the parties’ conduct and the historical context of the hybrid arrangement. For more than two decades, the defendant had accepted and facilitated this arrangement: it allowed the plaintiff to forgo, for three days per week, a 220-kilometre round-trip from her home to the defendant’s offices during rush hour. Full-time, in-office attendance would therefore have imposed a significant burden on the employee.
Byrd v. Welcome Home Children’s Residence Inc.
The Court in Byrd found that the defendant constructively dismissed the plaintiff by imposing unilateral, fundamental changes to her employment after approximately 20 months of successful remote work from Europe. The plaintiff, a manager of the defendant’s clinic and support services, relocated to Europe due to her husband’s three-year military posting that began in September 2020. In accepting this remote work arrangement, the defendant’s co-owner admitted that she did not tell the plaintiff she could be recalled to Canada. For at least a year, there were no issues with the remote work arrangement or the fluctuating number of hours that the plaintiff worked.
After the defendant hired an on-site residential program manager, it reduced the plaintiff’s work hours to 15 per week and reassigned most of her job duties in January 2022. The defendant (through its counsel) did not assert any recall right until March 2022, approximately 20 months after the plaintiff relocated. It offered the plaintiff two options: to reattend the workplace in person or resign.
The Court ruled that the defendant accepted remote work as part of the plaintiff’s job through sustained acquiescence. It specifically rejected the defendant’s claim that it retained a right to recall the plaintiff to on-site work, emphasizing that a term of such fundamental importance “calls out for clear and timely notice.”
Findings of Constructive Dismissal Outside Ontario
Recent authorities from Alberta and British Columbia align closely with Hagholm and Byrd.
In Nickles v. 628810 Alberta Ltd., 2025 ABKB 212, the Alberta Court of King’s Bench held on summary judgment that a long-standing work-from-home arrangement had crystallized into a fundamental term of employment. The plaintiff had worked predominantly from home for 37 years, attending the employer’s office only at her discretion and when operationally necessary. Following a change in ownership, the defendant required her to attend the office full-time and provided less than three months’ notice of the change. The Court held that the notice period did not cure the fundamental alteration to the employment contract, and that the unilateral imposition of mandatory, full-time, in-office work repudiated an essential term of the employment contract.
In Parolin v. Cressey Construction Corporation, 2025 BCSC 741, the British Columbia Supreme Court held that a long-standing ability to work flexible hours from home due to childcare commitments was a “binding term” of employment. The defendant’s imposition of a full-time, in-office schedule fundamentally altered the employment contract. The flexible work arrangement had been in place for 10 years while the work-from-home arrangement had been in place for over 3 years. The withdrawal of flexibility and remote work, treated as established contractual terms by virtue of consistent past practice and satisfactory performance, amounted to constructive dismissal.
These cases reflect a convergent judicial approach across jurisdictions: where remote or hybrid work has become a central feature of the employment relationship through a long-standing practice, it coalesces into a contractual term. An employer may not unilaterally withdraw that flexibility by imposing an RTO mandate. Absent employee agreement, such a change requires reasonable notice.
Mitigation and Remedies
Once constructive dismissal is established, the employee is entitled to damages that are often subject to their legal duty to mitigate by seeking comparable work (Lake v. La Presse, 2022 ONCA 742). Where reasonable notice applies, courts continue to apply mitigation principles to modern remote and hybrid work arrangements.
Hagholm confirms that an employee need not accept continued employment where doing so would ratify the constructive dismissal. In Nickles, the Alberta Court of King’s Bench reached the same conclusion, rejecting the employer’s argument that the employee should have accepted a modified arrangement involving partial in-office attendance while preserving the employer’s unilateral discretion to increase office requirements. The Court held that acceptance of such a compromise would entrench the very change that constituted the constructive dismissal.
On appeal in Hagholm (Hagholm v. Coreio Inc., 2018 ONCA 633), the Ontario Court of Appeal rejected the defendant’s submission that the plaintiff was obliged to continue working for the defendant in order to mitigate her damages. The Court declined to interfere with the motion judge’s findings. Even if the motion judge made an error, it would be objectively unreasonable to require a 60-year-old employee who, more than 20 years earlier, had stipulated she would not accept a position if it required her to commute from Waterloo to Toronto every day, to mitigate her damages by doing just that. The Court also upheld the motion judge’s finding that the plaintiff’s application to other employers in the Greater Toronto Area did not mean she would have accepted those jobs without a work-from-home provision. Applications to positions involving an equivalent or longer commute during the notice period did not undermine the plaintiff’s constructive dismissal claim.
Practical Guidance in the Return-to-Office Era
The jurisprudence supports several practical tips for employers.
- Define work location expressly. Employers should clearly specify the place of work in their employment agreements and expressly reserve the right to require in-office attendance where desired. Employers must clearly distinguish temporary accommodations from indefinite or permanent working arrangements.
- Provide sufficient notice of changes. Long-standing remote or hybrid arrangements may constitute essential terms of employment. Before imposing full-time, in-office requirements, employers should consider whether they need to explore other avenues such as providing reasonable notice or obtaining employee consent.
- Communicate recall expectations clearly and early. Employers should communicate recall rights and RTO expectations in writing, with specificity and sufficient lead time. Courts will discount late, vague, or inconsistent assertions of recall authority.
- Do not assume mitigation through work performed in altered roles. Employers should not assume that employees are required to mitigate damages by accepting modified roles. There exist circumstances, as noted above, where courts can find that an employee does not need to mitigate their damages in this manner after their employer implemented a substantial change in working conditions.
In summary, remote and hybrid work arrangements are not always peripheral or exceptional. Where the evidence supports it, such flexibility is an essential term of employment. Employers should assess their RTO mandates carefully to assess whether such actions may constitute constructive dismissal and expose them to significant liability.
About the Authors
Alycia’s legal practice focuses on data labour, employment, and data privacy law, with a particular interest in the technology industry. She is passionate about understanding her clients' businesses, their operations and strategic visions, continuously looking at fresh and innovative ways to approach the complexities faced in the ever-changing legal landscape. Carson’s practice focuses on providing practical and strategic advice to ensure the long-term viability of employment relationships. This article was also provided with thanks to Kaitlin Mak, who contributed to the research for the article.
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