A marketing director with a long-established flexible work arrangement was constructively dismissed when her employer told her she must return to working in the office full-time, the B.C. Supreme Court has ruled.
T.P. was awarded 19 months’ reasonable notice damages after she was constructively dismissed from her job at a Vancouver real estate developer when it eliminated her work-from-home arrangement and flexible schedule.
The court found the plaintiff’s work arrangements — which had been in place for years and formally reinforced during the pandemic — constituted an essential term of her employment contract. By unilaterally changing these terms, the employer breached the contract and constructively dismissed her.
Background
T.P. began working for the company in April 2005, initially as a development manager. After returning from maternity leave in 2013, she agreed with the company’s executive vice-president that she would have flexibility in her work schedule to accommodate childcare needs.
In 2018, she was promoted to director of marketing and given a formal job description. T.P. was told the company would consider a salary increase with the promotion, though this increase never materialized despite numerous requests over the following years.
When the COVID-19 pandemic began in March 2020, T.P. began working from home along with other employees. While most staff eventually returned to the office, T.P. continued working remotely with company approval, particularly as she had a child with health concerns.
In June 2021, the company approved T.P. setting up a permanent home office and purchasing her own equipment, further solidifying this arrangement.
The pivotal meeting
The situation changed dramatically during a May 10, 2023 meeting between T.P. and the vice-president of development. The court accepted T.P.’s account that during this meeting, she was:
- Told she must return to working in the office from 9 a.m. to 5 p.m., Monday to Friday
- Offered a salary increase of just $1,400 per year (from $93,600 to $95,000)
- Informed that her position was more comparable to a marketing manager than a director since she didn’t supervise a team
The vice-president also told T.P. that the company’s president was “adamant” she return to the office, and repeatedly asked if this requirement was a “non-starter” for her.
Following this meeting, T.P. concluded she had been constructively dismissed and advised the company of this conclusion before filing her claim.
Legal analysis
In its ruling, the court applied the two-pronged test for constructive dismissal:
- Was there a unilateral change by the employer that both constituted a breach of the employment contract and substantially altered an essential term of the contract?
- Did the employer engage in conduct that would lead a reasonable person to conclude the employer no longer intended to be bound by the terms of the contract?
The court found that T.P.’s flexible work hours and ability to work from home were established oral terms of her employment contract, which had been endorsed and supported by the employer for ten years (flexible hours) and three years (remote work).
“I have concluded that a term of [T.P.’s] employment contract was her ability to work flexible hours at home, due to childcare commitments,” the court wrote. “While I accept that employers have the ability to manage their workforce, including the location of work, that is tempered where a binding term in an employment contract exists.”
The court found that by unilaterally changing these terms without reasonable discussion or notice, the employer breached the contract.
Additionally, the court observed that the company’s meagre salary increase, coupled with its comparison of T.P.’s role to a marketing manager position rather than her actual director title, effectively constituted a demotion. The court noted that comparable marketing director positions at other firms commanded salaries of over $125,000 — far more than the $95,000 offered to T.P.
“The combined effect of a direction to return to work at the office without notice, the provision of such a small salary increase, and [the vice-president’s] reference to a Marketing Manager position as the most comparable position established, in effect, a demotion for [T.P.], who had been working and treated all along as a Director of Marketing,” the court stated.
Mitigation efforts
The employer argued that T.P. failed to mitigate her damages by not searching for replacement employment and instead starting multiple business ventures.
After her constructive dismissal, T.P. first attempted to start a small residential development company, then pivoted to developing an AI-based interior design product. When technological limitations made that unfeasible, she redirected her focus to creating an interactive learning platform for teens.
The court rejected the employer’s mitigation argument, finding that T.P. had made “fulsome efforts” in industries she was familiar with. The court emphasized that mitigation efforts must be judged from the perspective of the employee, not the employer:
“The question of whether the employee has acted reasonably must be judged in relation to her own position, and not in relation to that of the employer who has wrongfully dismissed her.”
Punitive damages denied
While awarding 19 months’ reasonable notice damages totaling approximately $148,000, the court rejected T.P.’s claim for $50,000 in punitive damages.
“While I conclude the plaintiff was treated poorly by her employer, I do not find that this was done with malice, but rather with a careless, dismissive attitude,” the court wrote, adding that punitive damages are awarded only in exceptional cases where conduct is “malicious and oppressive.”
For more information, see Parolin v Cressey Construction Corporation, 2025 BCSC 741 (CanLII).
