February 28, 2017

Mobility Clause in Redundancy Situation

The Employment Appeal Tribunal (EAT) in Kellogg Brown & Root (UK) Ltd v (1) Fitton UKEAT/0205/16 and (2) Ewer UKEAT/0206/16 considered whether two employees had been unfairly dismissed for redundancy when they refused to relocate to another office.

When Kellogg Brown & Root (Kellogg) decided to close the office in which Mr Fitton and Mr Ewer worked, it told them they were being relocated to another office, some 30 miles away. In doing so, Kellogg sought to rely on a mobility clause in their employment contracts which stated that Kellogg “may require you to work at a different location including any new office location of the company either in the U.K. or overseas either on a temporary or permanent basis. You agree to comply with this requirement unless exceptional circumstances prevail”. Both refused to relocate and were dismissed.

At first instance, the Employment Tribunal found that the reason for the dismissals was redundancy and that Kellogg’s failure to follow a fair dismissal process made those dismissals unfair. On appeal, however, the EAT found that the reason was misconduct, namely the employees’ failure to follow a reasonable instruction, and not redundancy. Nevertheless, the dismissals were still unfair because (a) the mobility clause was drafted too widely, rendering the instruction to relocate unlawful, and (b) the relocation was unreasonable as it significantly extended the commute to work for both employees. As such, the employees had acted reasonably in refusing to comply with the instruction.

This case highlights the importance of having in place a well-drafted mobility clause, as well as treading carefully before seeking to rely on such a clause to relocate employees.

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