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A long-tenured employee. An unwritten employment contract. A flexible work arrangement approved and relied on for a decade. A salary review meeting that ended with a return-to-office direction, a nominal raise, and a quiet demotion in all but title. The April 2025 BC Supreme Court decision in Parolin v. Cressey Construction Corporation (2025 BCSC 741) is a significant constructive dismissal ruling with practical consequences for any BC employer managing flexible work arrangements, remote work policies, and salary reviews for long-serving employees.
Managing flexible work arrangements, remote work policies, or salary reviews in BC?
This case demonstrates how informal arrangements approved over years can crystallize into binding employment terms. Get legal advice before making changes to long-standing arrangements without notice.
What happened
Tracy Parolin joined Cressey Construction in April 2005 as a Development Manager and was promoted to Director of Marketing in 2018. Her employment was governed by an unwritten contract of indefinite duration. When she returned from maternity leave in 2013, her manager agreed to flexible working hours to accommodate her childcare responsibilities. This arrangement was approved, documented, and relied on continuously for over a decade. During the pandemic in 2020, she began working fully from home, an arrangement subsequently approved by her then-supervisor and supported by the company approving a home office setup in June 2021.
Between 2018 and 2023, Parolin repeatedly sought a salary increase for her Director of Marketing role. The company delayed and deflected for five years. On May 10, 2023, a meeting was convened to address the salary question. She was offered a raise of $1,400 per year to $95,000 from $93,600 based on Marketing Manager comparables rather than Director of Marketing benchmarks. She was simultaneously directed to return to the office full-time, Monday to Friday, 9 to 5. The Court found the direction was non-negotiable and that Mr. Cressey was “adamant” she return to the office. Parolin concluded she had been constructively dismissed and filed a claim for damages.
What the Court found
Flexible work hours and remote work were implied terms of the employment contract
The Court found that Parolin’s flexibility in work hours, established on her return from maternity leave in 2013, was an implied term of her employment contract. This term had been approved, documented in payroll records, and relied upon continuously for ten years. Her remote work arrangement, similarly approved and supported during and after the pandemic, was also found to be a binding contractual term. Both could only be changed with reasonable notice or discussion.
The unilateral direction to return to office without notice constituted constructive dismissal
The combined effect of the return-to-office direction, the nominal salary increase calculated on Marketing Manager rather than Director of Marketing comparables, and the effective denial of Parolin’s Director of Marketing status amounted to a fundamental breach of her employment contract. A reasonable person in her position would have concluded that the essential terms of the contract were being substantially changed. The Court found constructive dismissal was established.
Alleged performance issues without documentation carried no weight
The company’s witnesses referenced performance concerns as background context for Parolin’s 2018 promotion. The Court dismissed this evidence because the concerns were never put to the employee, there were no performance reviews, and no documents of any kind substantiated the allegations. Undocumented performance concerns raised for the first time at trial were given no weight.
Starting multiple businesses was not a failure to mitigate
The defendant argued Parolin should have searched for comparable employment rather than starting businesses. The Court rejected this, finding her business ventures were in industries she knew well, pursued with genuine effort and reasonable commercial approach, and that an employee is not required to minimize the former employer’s liability only to act reasonably in her own interests. The Court accepted that available comparable positions requiring full-time office attendance were not genuinely comparable given the contractual terms she had lost.
Punitive damages were not warranted
The plaintiff sought $50,000 in punitive damages, arguing the company had implemented a plan to exit her because of her childcare commitments and her decision to consult a lawyer. The Court declined, finding the conduct was careless and dismissive rather than malicious or oppressive. Punitive damages require outrageous conduct rising to the level that would offend the court’s sense of decency, which was not met on the evidence available.
Four employer lessons from this decision
Informal arrangements become binding terms over time
The most significant lesson from this case is how a flexible work arrangement that was never formally documented became a binding contractual term through consistent approval and reliance over a decade. No written agreement existed, yet the Court found the arrangement was implied from the conduct of both parties over ten years. Employers who have informally accommodated scheduling or remote work arrangements need to understand that these arrangements can crystallize into terms that cannot be changed without notice, discussion, or consent. If a change is contemplated, legal advice should be obtained well before the conversation with the employee.
Return-to-office directions cannot be imposed without notice where prior flexibility was agreed
This decision joins a growing body of BC case law establishing that where remote or flexible work was agreed to and relied upon, an employer cannot simply issue a blanket return-to-office directive without meaningful notice or process. The fact that other employees had returned to the office did not override the individual contractual terms Parolin had established. Employers implementing return-to-office policies must assess whether any employees have individual arrangements that constitute contractual terms requiring proper notice or consent before change.
Salary reviews must engage with the employee’s actual role and documentation
The Court found the company’s salary review was dismissive of Parolin’s actual duties and title. Mr. Kendall produced no documentation of his comparable salary analysis. The Court drew a negative inference from the absence of documentation and preferred the employee’s evidence of market comparables from industry witnesses. Where a salary review reaches conclusions that differ significantly from the employee’s understanding of their role, and where the employer cannot produce the methodology behind the review, the credibility of the process will be undermined at trial.
Performance concerns not communicated to the employee are worthless at trial
Management witnesses referenced performance concerns that were never communicated to Parolin, never documented in any form, and never made the subject of any review or feedback. The Court dismissed this evidence entirely. In BC, undocumented performance concerns that surface for the first time during litigation whether to justify a demotion, a salary decision, or a termination will generally be given no weight. If performance is genuinely an issue, it must be addressed contemporaneously, in writing, and with the employee given a genuine opportunity to respond.
Are you planning changes to a long-standing remote work arrangement or conducting a salary review for a senior employee in BC?
Informal arrangements approved over years can be binding contractual terms. Salary reviews that are not properly documented and tied to the employee’s actual role create significant liability. Get legal advice before making changes.
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Practical takeaways for BC employers
What happens next
The case does not end here. Following the April 2025 judgment, Cressey sought a stay of execution of the damages award pending an appeal to the BC Court of Appeal, arguing the decision contained errors in its interpretation of the unwritten employment contract and in the mitigation analysis. In July 2025, a justice of the Court of Appeal dismissed the stay application, finding Parolin had sufficient assets to repay the judgment if the appeal succeeded and that the risk of non-recovery was speculative. The stay was refused and Cressey was required to pay the judgment while the appeal proceeds. The substantive appeal remains pending.
Questions about flexible work arrangements, return-to-office policies, or constructive dismissal risk in BC?
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The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©
The post Parolin v. Cressey Construction: When Informal Flexible Work Arrangements Become Binding Contractual Terms appeared first on Achkar Law.