Why being allowed to work from home doesn’t mean staff can work from anywhere

Howard Levitt: Employers can face great risks when workers decide to uproot and move somewhere new.

While employers may be permitting remote work during the current pandemic, that does not provide a licence to staff to move anywhere with impunity. An employee’s decision to change their permanent residence can have significant effects on their employer and even lead to discipline or discharge in some circumstances.

Many employees in more expensive, densely populated areas with stronger COVID-19 restrictions, such as Montreal, Toronto and Vancouver, have elected to move either to the suburbs, smaller towns, their summer cottages or even abroad. Some have even moved hundreds of kilometres from their physical work spaces, seemingly convinced that either the pandemic will never end and that they will never return to the office, or have started to believe that their ability to work remotely is a right continuing in perpetuity. They are wrong and can be fired if they are not available once recalled. The naivety of some employees aside, employers can face great risks when workers decide to uproot and move somewhere new, even while remote work is permitted. It is not the distance of the move that is relevant in this context but the location.

A move between legal jurisdictions changes the rules. The laws governing the working relationship such as employment standards, human rights, privacy, taxation, workplace health and safety and workers’ compensation. Employers become subject to those new statutes, regulations, policies and standards, sometimes unbeknownst to them if the worker did not disclose their move.

Those changes in law can cause serious problems with business logistics and cost increases, particularly when the laws of the new jurisdiction are more favourable to employees or require substantially more taxes, fees and other remittances.

The problem is not limited to the crossing of international borders. A move of more than a thousand kilometres from Toronto to Thunder Bay is less problematic than a move of less than one kilometre from Ottawa to Gatineau. There are remarkable differences in employment laws between Ontario and Quebec.

Employment relationships are generally provincially regulated, and each province has its own unique set of laws. For example, the laws of Nova Scotia do not allow an employer to dismiss an employee with 10 years or more of service without good reason or just cause, a much more onerous requirement than in most other provinces.

The variation in international laws can be even more glaring. For those who think that the employment laws of Canada are overly onerous and employee-friendly, consider those of Japan which places far greater regulatory obligations on employers, and where it can be much more expensive to dismiss an employee.

A Japanese employment lawyer I was working with advised me that, in Japan, it can be a seemingly unrecoverable dishonour to be dismissed from one’s employment, and that the laws there have evolved to address that sensitivity and other local cultural factors such as overwork.

Then there are other regulatory consequences. Did your company intend to open a new office in Seattle or Paris for tax and corporate regulatory purposes? Such a move may substantially increase taxes, payroll expenses and add new business structure and corporate filing requirements.

Consider also whether an employee loses their access to workers’ compensation coverage, which some provinces extend to foreign jurisdictions, but only in limited circumstances and for brief period of time. Coverage would often be preferred in those circumstances because non-coverage could present an opportunity for the employee to sue for work-related injuries.

To reduce the likelihood of that occurrence, be clear that remote workers, wherever they are, should be instructed in writing to keep their workspace in ergonomic design, clear and free of hazards and not to perform work or any work-related activity outside of their home office. Otherwise, you might end up with an injury claim from an employee, such as a COVID-19 infection that they contracted while “purchasing office supplies” during their stint of remote work in Ibiza.

Then there are issues with productivity if an employee is in a different time zone from their employer. Even if the employee commits to being available during local working hours, how active and alert will they be if it’s the middle of night in their new remote working location?

Given all of those issues, employees can be disciplined, or even discharged, for moving to a foreign jurisdiction without express permission from their company, if it sets out such rules in advance. Expectations should be communicated clearly. It is important for employers to develop remote working policies that not only cover productivity and work schedules, but also geographical location and the right to recall.

Another thing employers can do is institute policies assigning reduced compensation for employees who choose to work in jurisdictions which create additional costs or regulatory burdens for those employers as long as they maintain their compensation if they continue to work from their preexisting homes.

Got a question about employment law during COVID-19? Write to me at levitt@levittllp.com. Questions are edited for clarity and space.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers. He practices employment law in eight provinces. He is the author of six books including the Law of Dismissal in Canada.