In late March, as the pandemic hit swift and hard, along with the obvious panic and uncertainty, there was also something approaching a sense of novelty: some of us would now get to work from home. No more commute, dress code, or cubicle.
Over the past five months the ability to work from home has proved to be a double-edged sword. It has allowed many businesses to continue operating, and some workers to keep earning a living.
The flip side, however, cannot be ignored. Many individuals have struggled to work from home. Some have undertaken the feat of working while caring for young children. Others have been isolated and fought loneliness and depression. Beyond that, there are countless other unanticipated problems that have emerged for those working from home: lack of space and/or proper office furniture; the unending workday; anxiety; lack of motivation; loss of camaraderie, and relationship/domestic issues.
Despite these issues (good and bad), one thing that the pandemic has shown is that some jobs can be performed quite easily from a remote location, perhaps indefinitely. This realization has led some to question whether a traditional office is necessary anymore. The Cloud, email, and video conferencing have arguably filled the gap.
There are clear benefits to employers in getting rid of the traditional office: less need for physical space (and the costs associated with building, renting and/or maintaining it); an ability to justify lower wages (as employees are no longer incurring costs associated with commuting, etc.); and an overall need for fewer staff.
This reality has been hitting close to home. In May 2020, Ottawa-based Shopify announced that “office centricity is over” and that it is moving forward with a permanent remote work model for most employees. Likewise, the Conference Board of Canada announced via Twitter that it would transition entirely away from the office and a large telecommunications company, Rogers, has decided against renewing the lease on an Ottawa call centre (instead having close to 400 customer service agents work from home as part of a pilot project).
Some experts would argue that the loss of office work and “face time” is hugely detrimental. The more concerning implication of remote work, however, is that when employers no longer need staff in the office, why would it matter that they are located in Ontario at all? We have already seen how this could happen: in July, Barbados Tourism invited Canadians to apply and work remotely from the Caribbean for a year. On paper this may sound enticing, but it could be the start of a trend that in the long-term harms our economy and our quality of employment.
Working remotely outside of Ontario may also raise interesting questions about which laws apply. For example, if you were to take off to Barbados to work for a year would your rights and entitlements continue to be governed by Ontario’s employment laws?
According to section 3(1) of the Employment Standards Act, 2000 (“ESA”), its protections apply to:
- work performed in Ontario; and
- work performed both in, and outside, Ontario, where the work being performed outside the province is a continuation of work performed in Ontario.
Consider this recent example (albeit pre-pandemic) where the Ontario Labour Relations Board considered the question of jurisdiction for remote work. The affected employee performed almost all of his work in the U.S. for an employer with headquarters in Ontario. The employment contract, however, stated that the parties’ relationship was subject to Ontario law (including express reference to the ESA) and the employee also traveled infrequently to Ontario for meetings.
The Board determined the employee’s work in Ontario was only incidental to that which he performed in the U.S. The Board also gave little weight to the parties’ employment agreement (which the company drafted) and found Ontario law did not apply.
A recent decision from the Ontario Superior Court of Justice on this issue, however, adds a healthy dose of uncertainty to any clear guidance that may be drawn from the Labour Board case.
In McMichael v. The New Zealand & Australian Lamb Company, the employee worked for a US-based company’s as its Vice-President of Operations at a processing facility in Los Angeles, California. Despite neither the employer nor the employee working or being physically located in Ontario, the parties’ written employment agreement provided that their relationship was to be governed by, and construed in accordance with, Ontario law.
Notwithstanding the employee’s work having no apparent connection to Ontario, the Court took jurisdiction and awarded wrongful dismissal damages to the plaintiff employee.
In allowing the matter to proceed under Ontario’s laws, the Court noted:
There is no real dispute that the plaintiff worked for US Lamb, a New Jersey company with its head office in the State of Connecticut, and the plaintiff was physically situated in the State of California. Regardless of all those undisputed facts, Ontario law governs the Agreement and the employment relationship between the parties.
It is difficult to reconcile the preceding cases. In both, the parties sought to have their relationship governed by Ontario law. Ironically, it was the McMichael case, where there was no evidence of a connection to Ontario that the plaintiff succeeded in this regard. The inherent conflict between these decisions highlights the complexity and uncertainty around remote work and legal jurisdiction.
In closing, we need to be mindful of potential job loss from Ontario as a result of the new flexibility remote work provides. While we should be careful not to undervalue the potential benefits of working from home, post-pandemic, physical interaction should again play an important role in how we work together. Ideally, businesses will look to strike a balance that includes the best of each form of labour.
Vey Willetts LLP
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