Legal-ease: Workforce relocation

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When moving to new premises it is not always safe to assume that employees will make the move with you

The recent EAT case of Kellogg Brown & Root (UK) v Fitton and Ewer demonstrates that even where employees have signed up to an express contractual mobility clause, requiring them to relocate hinges on reasonableness. The question of reasonableness will be judged on a case-by-case basis.

In the absence of an enforceable contractual mobility clause, any insistence for the employee to relocate creates a risk that they may assert this change is a fundamental breach of contract (entitling them to resign and claim constructive dismissal). A constructive dismissal in this situation, or any dismissal when an employee refuses to comply with the location change, would be a redundancy. The redundancy may be unfair depending on the circumstances; including the reason for the location change, the impact on the employees, and the reasonableness of the consultation. If there are 20 or more employees at risk of redundancy the collective consultation obligations will be triggered, including the minimum 30- or 45-day consultation period.

It’s possible to seek to reach agreement with all employees on the relocation. The chances of reaching agreement will vary depending on factors such as how significant the location change is, the availability of public transport, increased travel times and costs, and the location of the employee’s home. Those with disabilities, children, or other carer responsibilities; those approaching retirement; and those without available transport or access to public transport will need to be approached with caution.

Consider measures to reduce the impact on staff such as adjustments to core hours, travel cost loans or providing a transport service. Do not underestimate the pull of sweeteners such as better facilities, on-site gyms or restaurants, which will go down well in the consultation process.

Where the location change is particularly significant and/or it is anticipated that you will be unable to reach agreement from employees voluntarily, then it would be advisable to deal with the relocation as a workplace closure redundancy from the outset. The roles in the new location will be available as alternative vacancies (or suitable alternative employment if the location change is not significantly different). The rules on collective consultation will kick in if the total number of redundancy dismissals will be 20 or more in a 90-day period.

Mobility clauses have a value if well-drafted and clear but ultimately the question of subjective reasonableness prevails.

Nina Robinson is a director at ESP Law, provider of the HR Legal Service

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