Like almost every aspect of contract law, this is a complicated, nuanced area
When the pandemic began, many companies that did not close shifted to remote work, which led to a large number of employees working from home. The shift to remote work caused a scramble for employers to create work-from-home policies in line with the law.
At first, the pandemic was tinged with optimism about its duration. Like troops marching to the front in August of 1914 who believed they would be “home by Christmas”, the consensus was that the pandemic would be a brief interruption before a return to normal.
We are two years into the pandemic with no end in sight. Widespread adoption of vaccines allowed employers to recall at least some of their workforce to the office. Simultaneously, a number of companies are transitioning to permanent remote work for all or some staff. Similarly, some employees, when recalled to the office, have requested a permanent remote work arrangement. This can create a few risks for an employer, including, as Stuart Rudner discussed, that an employee may acquire a permanent right to do so.
There are advantages and disadvantages to a company permanently transitioning to remote work, or permitting an individual employee to do so, the calculus of which is internal to an employer. Even only two years into the pandemic, there have been oceans of ink spilled on these considerations. If done correctly, the crucial detail is the decision regarding whether an employee may work remotely is the employer’s.
Accompanying this transition to remote work was a boom in home purchasing. Many found themselves working from a one bedroom or studio apartment shared with their significant other and their children or pets. For some, finding a residence with more space became vital. This boom in home purchasing was accompanied by a rapid home price increase in Ontario. This led to people looking further afield for property - sometimes out of the province.
At first, as companies scrambled to keep operations running, this was addressed as a matter of logistics: keeping the employee working, wherever that employee chose to be. Now, as these temporary arrangements become permanent, many companies want to know how to address their legal obligations to an out-of-province employee — usually by means of the employee’s employment contract.
The out-of-province employment contract
In addressing an out-of-province employee, an employer’s first consideration needs to be whether to prepare a new employment contract or permit the newly remote employee to abide by their existing employment contract.
Given that there may be multiple changes to the terms and conditions of the employee’s contract, there is merit in preparing a new employment contract for the employee. If the employee’s current contract is not up to date, this could be an opportunity to strengthen your legal position.
A contract is valid where consideration passes between the parties. Both parties must do something in exchange for the other’s agreement to do the same. An employer allowing an employee to work on the same terms and conditions is not sufficient consideration to create a contract. However, permitting a material change to these terms and conditions at the employee’s request, such as allowing them to permanently work remotely, would be enough to create a valid and binding contract.
The quid pro quo, effectively, is that you will allow them to work remotely if they accept the terms and conditions set out in the new contract. It must be clear that they will not be allowed to work remotely unless they sign.
So we know how to make this new employment contract binding — what terms and conditions should we include?
- What statutes are going to govern the employee’s employment? Most employment statutes hold that any work done in the province is covered by that statute. However, some employment law statutes include language that work performed outside of the province connected to the work done in the province is covered by that statute. Naming the governing statute removes all doubt.
- What if the employee must return to the home office for something that cannot be done virtually? The employer may specify in the employment contract that the employee must bear the expenses for travel to and from the home office for these meetings.
- How is the work going to be done? An employee permitted to work remotely must be in a role which can be done remotely, which in 2022 usually means a job done over the internet. The employer may include a clause in the employment contract that it is a term of employment that the employee has access to a reliable, high-speed internet connection, and a quiet, private space to work which will provide the necessary level of confidentiality for documents and conversations.
- What time zone is the employee operating in, related to the employer’s hours of work? Most employment contracts include the employee’s expected hours of work. The employer may specify the time zone in which these expected hours of work are to take place.
- Who will pay for the furniture, equipment, internet, and other items the employee will need to work from home?
These considerations are a starting point — there are multiple factors to consider when preparing a new employment contract for the remote employee whose contribution now comes from outside of the province.
Like almost every aspect of contract law, this is a complicated, nuanced area. If you have an employee who has moved out of the province and is requesting a permanent remote work arrangement, contact an employment lawyer to ensure that any steps you take are in compliance with the law and protect your interests.