Employers must make their expectations clear when making arrangements for employees to work from home.
With today’s tools and technology, it isn’t unusual for businesses to have one or more employees working remotely from home, and it’s commonplace for companies in the business of developing the technology that supports or enables remote communications.
Since employees who work remotely are not subject to the same day-to-day supervision of employees on site, it's very important that everyone is clear about work expectations and deliverables. In my blog Telecommuting and Working from Home, I provided some tips that employers should consider when implementing remote working arrangements.
Staley v Squirrel Systems of Canada Ltd., a recent trial decision from B.C., highlights some of the pitfalls that can arise when an employer and employee have a misunderstanding about how remote working would change their relationship. Squirrel Systems develops and sells systems and software for the food service industry, and its offices are in Burnaby. Staley was a manager with Squirrel Systems who decided to move to Montreal, Que., when his wife was transferred there. Staley didn’t ask permission to go. However, because he was a good employee, his manager looked for a way for Staley to provide some services while living in Montreal. After Staley moved, he worked remotely using telephone, email and other tools for a number of months.
The problem was neither Squirrel Systems nor Staley were clear about what effect the move would have on their relationship. Squirrel Systems did not have other business locations and its only other experience with an employee working remotely had been handled by changing the employee’s status to an independent contractor. Staley claimed the company had agreed he would continue as a permanent employee with all of the salary, benefits and severance rights of a regular employee; the company argued if it accommodated Staley’s move, he'd be an independent contractor who could be terminated on short notice if things weren’t working.
After six months of discussion, the parties still did not agree on the continued terms of Staley’s relationship with Squirrel Systems. Finally, the company gave Staley three months notice to report to work in Burnaby or risk having his employment terminated. When Staley did not report to work as demanded, he was fired. Staley then sued Squirrel Systems for damages for wrongful dismissal.
At trial, Staley claimed he was promised continued employment while in Montreal, or alternatively, that because Squirrel Systems had allowed him to work remotely while trying to work things out, that it had condoned the remote employment relationship. The company claimed Staley had unilaterally moved to Quebec and that any employment continuance for the discussion period was temporary in recognition of Staley’s previous long-term employment. After four days of trial, the court sided with the employer. The judge found that while Squirrel Systems contributed to some of the confusion regarding Staley’s status, it was still entitled to rely on the original terms of the employment relationship. Thus, when negotiations broke down and Squirrel Systems demanded that Staley report back to work in Burnaby, it was justified in terminating Staley’s employment when Staley did not comply.
While many would agree that Staley’s assumption that he could just move across the country and continue his existing employment arrangements was unreasonable, I have encountered a number of employees who, like Mr. Staley, believe that they have the right to move and continue their employment remotely. Squirrel Systems won the case, but lost by other measures. Besides the time and effort spent trying to come up with a new agreement after Staley moved to Montreal, Squirrel Systems was limited in the costs it could recover and court costs would only cover a fraction of the employer’s actual defense expenses.
This decision highlights the importance of ensuring that any arrangements to modify an employee’s work location should be agreed to in writing before any changes occur. Also, if any employee takes unilateral steps to change their work arrangements, employers should be clear that allowing the change for a limited time does not mean the employer is condoning or agreeing in principle to the new arrangements.
This blog is written by Nicole Byres of Clark Wilson LLP and made available by BCBusiness to provide general information on employment law, and is not a substitute for competent legal advice from a lawyer licensed to practice in your jurisdiction. Neither the reading of this blog nor the sending of unsolicited comments or emails creates a lawyer-client relationship with the writer or Clark Wilson LLP.