As a huge swath of the Canadian workforce began working entirely remotely in 2020, employers increasingly considered employee requests to relocate. Some employees were looking to return to their home province or country to be with loved ones. Others were looking for a change of scenery and saw an opportunity to do so. Whatever the reason, offering employees the opportunity to take advantage of work-from-home arrangements by working from their chosen location can be a welcome perk. Some employers have even included guidelines for relocation as part of remote work policies.
There are a few key things an employer should consider when approving employee relocation requests.
Which employment standards legislation applies and who has jurisdiction to adjudicate employment-related issues?
When a worker moves to a new province or country, it is very likely that the minimum employment standards of the new location will apply to the worker. Employers should consider where the employee is requesting to relocate and whether the employer can ensure the employment standards in the new location can be met.
Some provincial employment standards legislation applies even when an employee is not working exclusively in that province. For example, Ontario’s Employment Standards Act applies even when the employee’s work is to be performed in Ontario and outside Ontario but the work performed outside Ontario is a continuation of work performed in Ontario.
For example, if an employee relocates to a province outside of Ontario, but continues to report to the office in Ontario, is required to return to Ontario for annual training or meetings, and/or the relocation is temporary, Ontario’s minimum employment standards are likely to continue to apply. An employer in this situation may then be in a position where they need to ensure their employment terms adhere to the minimum standards in multiple jurisdictions.
Access to healthcare & medical benefits
Employee medical benefits packages do not always provide coverage for medical treatment overseas or out of province, particularly if the employee is permanently relocating. Employers should consult with their benefits providers to understand whether these benefits will still be available to the employee following a relocation. If not, employees requesting to relocate should at the very least be informed of this change to their compensation package that will result from any approval of their request.
Will the move be permanent or temporary?
A key consideration for employee relocations is whether the relocation can be approved permanently or only on a temporary basis. Is it possible the employer will need the employee to return to their original location of work? Clearly establishing the term of relocation, in writing, will assist an employer in the event the employee later refuses to return. Failing to do so may reasonably lead the employee to believe they were approved to relocate indefinitely. In that case, requiring the employee to return later could lead to a successful claim for constructive dismissal. Employers should be aware that even temporary approvals can create some risk of constructive dismissal, for example when the temporary approval is extended numerous times.
Tax and immigration-related implications
The considerations set out above relate to employment law only. Relocating employees can have other serious implications for a business, including unintended tax consequences or immigration-related consequences, both for the employee and the business. Employers will want to speak with both their accountant and potentially an immigration lawyer before approving an employee relocation.
Interested in permitting employees to work from abroad or approving an employee’s request to move to a new province? Get in touch!
