Mobility clauses

Section 139 ERA 96 says there can be a redundancy where the employer’s need for employees to carry out work in “the place where they are employed” has ceased or diminished. This is known as relocation redundancy.

However, the contract may contain a “mobility” or “relocation” clause. This is a clause that allows the employer to require the employee to move to work in a new location. The law is currently unclear as to whether there will be a redundancy where the employer relies on a mobility clause to require the employee to move to a new location. This is very unsatisfactory.

The established position is that there can be a redundancy where an employee who has always worked in one location is told to relocate to a different location, even though the contract contains a mobility clause (High Table Ltd v Horst [1997] EWCA Civ 2000). However, reps should be very cautious in these circumstances, especially because the Court of Appeal took the opposite view in a later case, Home Office v Evans & Laidlaw [2007] EWCA Civ 1089. In this case, the Home Office was allowed to rely on a contractual mobility clause to argue successfully that two employees who refused to relocate to a different office following a branch closure were dismissed for misconduct — refusing to obey a lawful order, rather than for redundancy, because the contract allowed the employer to require the employees to relocate.

The Home Office case shows how sometimes a refusal to relocate can result in a fair dismissal. There is also a danger that an offer of a new role in a different location could be an offer of suitable alternative employment. This would remove the entitlement to a redundancy payment, as well as enabling the employer to argue that the employee has failed to mitigate loss and should receive no compensatory award (see Alternative work and Chapter 10: Unfair dismissal).