Employers should carefully approach RTO for successful, legally compliant transition
Exclusive to Canadian HR Reporter from Rudner Law.
Like the Backstreet Boys, big banks are singing, “I want it that way,” as they direct employees back to the office.
Employees are crying back: “Tell me why.”
As back-to-school season approaches, so too does a widespread return-to-work (RTW) or return-to-office (RTO) movement, especially within Canada's financial sector. Major institutions like BMO and RBC are mandating a four-day in-office week starting this September, with TD Bank set to follow suit later this fall.
This shift, driven by the apparent desire for enhanced collaboration and productivity, raises critical questions for employers considering similar mandates. Employers should carefully approach such changes, as successful and legally compliant transition hinges on a thorough understanding of the legal framework and employee considerations.
Tell me why: It’s all about the contract
Generally, employers can dictate whether an employee can work from home or must return to the office — either fully or on a hybrid model — unless there was an agreement to the contrary. However, employers sometimes underestimate their rights while employees overestimate theirs.
The location of work is a fundamental term of the employment contract. If a contract explicitly states the employee must work from the office, that provision will typically govern.
However, if the contract is silent on the location of work, or if it has been implicitly amended through past practice, the situation becomes more nuanced. This means even if a contract initially required in-office work, a prolonged period of remote work (for example, five years) can establish a new contractual term through "past practice".
In such cases, a unilateral mandate to return to the office might constitute a breach of contract or constructive dismissal.
RTO: Navigating employee refusal and accommodation
What happens when employees resist, screaming “Oh my god, we’re back again?!”
There are two primary reasons an employee might legitimately refuse to return to the office:
Contructive dismissal: As discussed above, if the employer’s mandate to return to the office fundamentally alters a term of the employment contract (either explicit or established through past practice), the employee may argue constructive dismissal.
Need for accommodation: Employers are required to accommodate individuals to the point of undue hardship, where the need for accommodation relates to a ground protected by human rights legislation such as disability or family status (e.g. childcare obligations). Undue hardship is a high threshold to meet, but it is important to remember that employers are obligated to provide reasonable accommodation based on the employee’s legitimate needs, not their preference.
The accommodation process is a two-way street: employees must provide sufficient information, while employers must assess the need for accommodation, options for accommodation, and their ability to accommodate the employee. Open dialogue and careful consideration of individual circumstances is critical.
For example, an employee may legitimately need to work remotely, at least from time to time, due to medical reasons or childcare obligations. A conversation with the employee can shed light on their reasoning, allowing employers to determine appropriate next steps, which may include accommodation rather than jumping the gun to discipline.
Ultimately, if the employee establishes a legitimate need for accommodation, the employer must propose something reasonable. However, the employee cannot insist on one specific form of accommodation if other reasonable forms exist.
Quit playing games: The challenge of constructive dismissal
The pandemic has changed employee expectations, with many now valuing remote work and flexibility. This can challenge employers mandating back-to-office, potentially leading to "constructive dismissal" claims.
For example, some employees may ask employers to “quit playing games”, arguinge that a sudden, mandatory return to the office, especially after a prolonged period of successful remote work, fundamentally alters the terms of their employment.
This could form the basis of a "constructive dismissal" claim, where an employee feels compelled to leave their job due to a substantial, unilateral change in their working conditions.
Such claims are less likely if employers clearly communicated, in writing, that alternative or remote work arrangements were temporary. We have advised all of our clients to retain discretion to change the location of work; employers that have done so have far more flexibility.
Even if the employer did not already have the right to insist on in-office attendance, if the employee agrees to the change explicitly or implicitly, they will typically not be able to subsequently challenge it as it was not unilateral.
Best practices for employers with return to office
Given these complexities, employers should consider a measured and proactive approach and adopt the following best practices, so they don’t get caught in a “Larger Than Life” legal battle:
Clear communication: From the outset, explicitly state remote/hybrid arrangements are temporary or subject to change. This minimizes the risk of constructive dismissal claims later.
Phased transitions: If you must mandate a return to the office, consider a gradual return like the Ontario Public Service (OPS) (from 3 to 4 days to full in-office by January 2026). This helps employees adjust and employers manage office space constraints.
Engage in dialogue: Rather than drawing a line in the sand, employers should engage in genuine dialogue with employees to address concerns and proposals, which can help mitigate resistance and foster a more positive transition.
Consider accommodation needs: Be prepared to address requests for accommodation based on medical, childcare or other legitimate needs to ensure legal compliance and avoid liability.
Address practical concerns: Acknowledge employee concerns about commuting costs, logistics, and office space to boost employee morale and acceptance of new mandates.
While employers generally have the authority to mandate returns, a nuanced approach considering legal and practical employee concerns is essential for a smooth transition.
Finally, employers would be well-advised to seek legal advice from an employment lawyer to:
- prepare and implement strong, enforceable contracts
- strategize return-to-office plans, understanding the available options and their pros and cons
- make informed decisions
- develop necessary documentation (e.g. hybrid work policy)
- receive guidance to maximize their rights and flexibility and minimize risk and liability
Remember, it does not matter who you are, where you’re from — as long as you document it, you are one step ahead.
Nadia Zaman is a senior associate lawyer at Rudner Law in Toronto. She can be reached at (416) 864-8500 or [email protected].
