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Parolin v. Cressey Construction: When Informal Flexible Work Arrangements Become Binding Contractual Terms
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 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.
The appeal has been decided. In Cressey Construction Corporation v. Parolin, 2026 BCCA 199, the BC Court of Appeal dismissed Cressey's appeal and upheld both the constructive dismissal finding and the 19-month notice award. For what the Court of Appeal confirmed and added, see our post on the appeal decision and what it means for return-to-office mandates.
Here, a decade of approved flexibility and three years of remote work had crystallized into contractual terms. A return-to-office direction delivered without notice, alongside a nominal raise and an implied demotion, was a fundamental breach that cost the employer 19 months of pay in lieu of notice.
Managing flexible work arrangements, remote work policies, or salary reviews in BC?
This case shows how informal arrangements approved over years can crystallize into binding employment terms. Get legal advice before making changes to long-standing arrangements without notice.
Call: 1-800-771-7882 Speak With an Employment LawyerWhat 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 in payroll records, 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 helping set up a home office 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, bringing her salary to $95,000 from $93,600, calculated 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 hours and remote work were terms of the contract
Parolin's flexibility in work hours, established on her return from maternity leave in 2013, was a term of her employment contract, approved, documented in payroll records, and relied on for ten years. Her remote work arrangement, similarly approved and supported during and after the pandemic, was also binding. Both could only be changed with reasonable notice or discussion.
The unilateral return-to-office direction was constructive dismissal
The combined effect of the return-to-office direction, the nominal raise calculated on Marketing Manager rather than Director comparables, and the effective denial of Parolin's Director status amounted to a fundamental breach. A reasonable person in her position would have concluded the essential terms were being substantially changed.
Undocumented performance concerns carried no weight
The company's witnesses referenced performance concerns as background to the 2018 promotion. The Court dismissed this evidence because the concerns were never put to the employee, there were no performance reviews, and nothing documented the allegations. Concerns raised for the first time at trial were given no weight.
Starting businesses was not a failure to mitigate
The Court rejected the argument that Parolin should have searched for comparable employment. Her ventures were in industries she knew well and pursued with genuine effort, and an employee need only act reasonably in her own interests. Comparable positions requiring full-time office attendance were not genuinely comparable given the terms she had lost.
Punitive damages were not warranted
Parolin sought $50,000 in punitive damages, arguing the company had planned to exit her over her childcare commitments and her decision to consult a lawyer. The Court declined, finding the conduct careless and dismissive rather than malicious or oppressive, and not at the level required for a punitive award.
The 19-month notice award reflected Parolin's age at dismissal (55), her 18 years of service, and the seniority of her Director of Marketing role. The Court placed her above a managerial level and found the Bardal analysis warranted an award at the higher end of the range. BC employers should note that long tenure combined with a senior role and older age routinely attracts notice periods in the range of 18 to 24 months at common law.
Four employer lessons from this decision
Informal arrangements become binding over time
A flexible or remote arrangement that was never documented can become a binding contractual term through consistent approval and reliance over years. If a change is contemplated, get legal advice well before the conversation with the employee.
Return-to-office directions need notice where flexibility was agreed
Where remote or flexible work was agreed and relied on, an employer cannot issue a blanket return-to-office directive without meaningful notice or process. The fact that other employees returned does not override an individual's contractual terms.
Salary reviews must engage the actual role and be documented
The Court found the salary review dismissive of Parolin's real duties and title, and drew a negative inference from the absence of any documented comparator analysis. If a review reaches conclusions the employer cannot substantiate, its credibility will not survive trial.
Uncommunicated performance concerns are worthless at trial
Performance concerns never raised with the employee, never documented, and never the subject of feedback were dismissed entirely. If performance is genuinely an issue, address it contemporaneously, in writing, with a real chance to respond.
Practical takeaways for BC employers
Before you change a long-standing arrangement or run a senior salary review
- Audit any informal flexible or remote arrangements in place for an extended period. These may already be contractual terms that cannot be changed without notice.
- Before issuing a return-to-office policy or direction, assess whether any employees have individual arrangements amounting to contractual terms. A blanket policy does not override individual rights.
- Where a salary review conflicts with an employee's established title or role, document the methodology, produce the comparator data, and be prepared to defend the analysis with specifics.
- Never raise performance concerns at trial that were not communicated during employment. Undocumented concerns carry no weight and damage credibility.
- Where a long-serving senior employee is involved, get advice on notice-period exposure before any significant decision. A range of 18 to 24 months is realistic for this profile.
- Where a salary review is linked to a return-to-office direction, recognize that together they may be a fundamental change to employment terms, and should not be delivered simultaneously without careful legal review.
What happened next: the appeal
Following the April 2025 judgment, Cressey sought a stay 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. Cressey was required to pay the judgment while the appeal proceeded.
In May 2026, the Court of Appeal dismissed the appeal in full. It confirmed that the right to work from home was an essential term of Parolin's contract, that revoking it without reasonable notice was a constructive dismissal on its own, and that her decision to start a business was a reasonable form of mitigation. For a full breakdown of the appellate reasoning and what it means for return-to-office mandates, see our post on the Court of Appeal decision in Cressey Construction v. Parolin.
How Achkar Law helps employers
Achkar Law advises employers across British Columbia on employment litigation, constructive dismissal defence, and employment contract management. We help you assess whether remote or flexible arrangements have become contractual terms, structure return-to-office transitions with proper notice, and draft employment agreements and workplace policies that keep flexibility under your control.
Questions about flexible work, return-to-office policies, or constructive dismissal risk in BC?
Informal arrangements approved over years can be binding contractual terms, and salary reviews that are not properly documented create significant liability. Our team can review your workforce arrangements and help you make changes the right way. We advise employers across British Columbia and Ontario.
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The information in this article is general and is not legal advice. An employment lawyer can advise on your organization's specific situation. This article summarizes a public decision of the BC Supreme Court, 2025 BCSC 741, later upheld on appeal at 2026 BCCA 199.
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. ©