Mobility Clauses and Redundancy: Handle with Care

01 Mar 2017

Mobility clauses need to be handled with care, when a possible place of work redundancy arises. There are two approaches that an employer can potentially adopt when seeking to relocate staff:

  • To treat this as a place of work redundancy, as it is well established that the place of work for redundancy purposes, is where the employee actually works, rather than where they may be required to work under their contract of employment; or
  • To seek to rely on a contractual mobility clause in the contracts of employment, to require that staff relocate. It therefore follows that if there is no mobility clause in the contract, this will be a redundancy.

An employer should not switch between the two approaches, as this is very likely to make any dismissals that result, unfair.

Mobility Clauses: Getting it wrong

Kellogg Brown (Kellogg Brown & Root (UK) Ltd v (1) Fitton UKEAT/0205/16) is an example of an employer relying on a mobility clause and getting this wrong. They asked staff to relocate to another of their offices, some significant distance away. As part of the proposals, staff were offered financial compensation for additional travel costs and changes in core working times. When two of the staff refused to move, they were dismissed for refusing to comply with a reasonable instruction under their contracts. They brought claims for unfair dismissal and a statutory redundancy payment.

Although, the EAT accepted that Kellogg Brown dismissed the staff because of their alleged conduct (so no statutory redundancy payment was due), the dismissal was unfair because the employer could not rely on the mobility clause. The EAT said the mobility clause was excessively wide and not sufficiently clear; that the request to relocate was unreasonable because of the impact on the two staff; and that the refusal to relocate was not unreasonable given the employees’ personal circumstances.

Mobility Clauses: Getting it right

In light of the Kellogg Brown case, what should an employer bear in mind when it is considering relying on a mobility clause?

  • It must make sure that the mobility clause is clearly drafted, and that it is not too wide in its application (otherwise it may not be enforceable);
  • Even where there is a mobility clause in the contract of employment, it does not necessarily follow that it will be fair to dismiss an employee who refuses to comply with an instruction to relocate. In particular:
    • The clause must be exercised reasonably, including providing sufficient notice to staff that is it seeking to rely on the clause;
    • There should be a sound business reason for the relocation;
    • The request must be reasonable and the employer should consider whether any adverse impact on staff can be mitigated, for example by transitional arrangements or travelling allowances;
    • The employer must give proper consideration to individual employee concerns about the request. In the Kellogg Brown case, although the employer offered travel allowances and changes in core working times, this had limited (if any) impact on the personal circumstances that had been raised by the two staff, who brought claims.

For more information on how this EAT ruling might affect your organisation's business plans for the future please contact:

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