October 1, 2003 by Israel Foulon LLP
Question: I work for a company that is expanding its operations across Canada . Does an employer have an inherent right to require the worker to relocate to a different branch or even to a different city or country? If the worker refuses the request to transfer, can he be dismissed for cause?
Answer: Relocating an employee to a different location can constitute constructive dismissal if accepting such relocation is not a term or implied term of the employment contract. Constructive dismissal occurs when an employer unilaterally changes a basic term or condition of employment.
Generally it is an implied term of every employment contract that a worker will accept all reasonable transfers that do not involve a demotion or undue hardship. This is clearly the case where the nature of the work indicates that mobility is likely or where the worker has shown flexibility with respect to mobility.
In Smith v. Viking Helicopter Ltd., the court concluded the employer’s decision to move its business from Ottawa to Montreal for practical business reasons did not constitute constructive dismissal.
But the right to request that the worker relocate is not an absolute right. There are a number of factors that will be considered in determining whether it is reasonable or whether it amounts to a constructive dismissal, including the number and location of branches, the number of employees, the worker’s position and duties, whether the company is acting in good faith, whether the company has a legitimate business reason for relocating, the personal circumstances of the employee and whether the company will pay relocation costs.
Whether or not there are grounds for dismissal will invariably depend on the factors mentioned above. Provided there is no written term in the contract limiting the location of work, or the right of the employer to request a relocation, and there is a legitimate business reason with little or no hardship to the worker, it is likely the company will have a strong case for just cause dismissal in the event the worker refuses the transfer.
Before making a relocation decision, employers should discuss the possibility of relocation with the worker. Being aware of his personal circumstances prior to making any request is the best approach. Consider providing reasonable notice to the worker about the requirement to relocate. The longer the worker has been employed, the lengthier the notice should be.
Peter Israel is the senior partner in the Toronto law firm of Israel Foulon LLP – Employment and Labour Lawyers. He can be reached at 416-640-1550 or pi@qtw38575.mywhc.ca. A version of this article originally appeared in the Carswell publication, Canadian Employment Law Today