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  • Conner Lantz
    Keymaster
    Post count: 4836

    BC Employer, is considering relocating the factory which employs just over 100 employees when the lease expires. There are two potential sites, one about a 20 minute drive, one about 45 minutes away. What are the obligations of an employer to the employees? Would this type of a move be deemed a significant geographic relocation, thus changing the fundamental terms of employment and open us up to constructive dismissal?

    Conner Lantz
    Keymaster
    Post count: 4836

    First and foremost, sorry about taking so long to get back to you. Two things caused the delay: i. My vacation; and ii. How tricky this Q is and how much time it took to research.
    The answer to the Q: “Is X constructive dismissal?” is invariably “It depends.”
    The good news is that there’s tons of case law on whether geographic relocation constitutes constructive dismissal. The bad news is that almost all of it deals with relos of individual employees rather than companies or offices. Still, even while such cases are relatively rare, I’m pretty sure that the same principles that apply to const dismissal of individual employees for geographic relocation or transfer would apply equally to company moves. So let me break down the rules for you.
    First, it’s well established that geog relocation CAN BE one of the things triggering a constructive dism. A couple of examples:

    • Marshall v Newman, Oliver & McCarten Insurance Brokers Ltd.: Ontario Court of Appeal says transferring employee is constructive dismissal because employee was never informed that she could be required to work at other locations and being able to work in the original office was an implied term of contract.
    • Wilson v. UBS Securities Canada Inc. BC court says equity trader required to relocate from Vancouver to San Francisco was constructively dismissed because her employment contract didn’t contain an express or implied contractual term that allowed the company to transfer her and her expectation in joining the company was that she wouldn’t be transferred.

    Now we come to your situation. Based on these and other cases, the factors that would determine if your proposed move constituted constructive dismissal would include:

    1. Do you have a written contract with the 100 employees you’d be moving?
    2. If so, does it allow or ban you from relocating them?
    3. If there’s no contract, are there any implied agreements banning or allowing relocation?
    4. What were employees’ expectations regarding relocation when they started working? Note that in the cases above, expectation of staying in same office was a key reason relo was constructive dismissal?
    5. How, if at all, will the relo affect salary, benefits and working conditions–the greater the impact, the higher the risk of constructive dismissal
    6. Is the relo the only change or just one of many–the more adverse changes, the greater the risk of constructive dismissal
    7. Where are you moving to–the 20 minute commute location is about half as risky as the 45 minute one (unless there are other factors affecting commute like fact that 45 minute place can be accessed by public transit and the 20 minute one can’t)

    One of the things you can do to minimize your risks, other than securing employees’ agreement to move, is paying all employee moving expenses. And going forward, you may want to add a so called mobility clause (assuming your contract doesn’t already have one) giving you the power to require the employee to change place of work within a set radius or a city or a particular county or region, etc.
    Final note: Your Q has inspired me to do a full court research press for constructive dismissal cases involving geographic location of whole companies, as opposed to individual employees. When and if I find any such cases, I’ll loop back with you.
    For now, I hope this helps and I hope it didn’t come too late to be of any benefit. Thanks, Glenn

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