Relocation redundancy 




One common example of redundancy is where the employer relocates and no longer needs employees to carry out work in “the place where they are employed” (section 139, ERA 96). 




The employment contract may contain a mobility clause. Close attention must be paid to its terms, as the employer may argue that it removes members’ rights to a redundancy payment. 




In High Table Ltd v Horst [1997] EWCA Civ. 2000, the Court of Appeal ruled that whether or not fewer employees are needed in the place where the employee was employed is a question of fact, to be answered by looking at where the employee actually worked day-to-day before being dismissed. In that case, Ms Horst had always worked in the same location. The court said that she was entitled to a redundancy payment when her employer required her to relocate to new premises, even though her contract entitled her employer to force her to relocate. Employers should not be encouraged to use mobility clauses in employment contracts to defeat genuine redundancy claims, said the court. The same result was reached in Bass Leisure v Thomas [1994] IRLR 104. 




However, the Court of Appeal took the opposite view in this more recent case, which followed the closure of the Waterloo International Terminal in 2007: 




Employers who invoke a mobility clause late in the day, after announcing planned redundancies or starting redundancy consultation, are less likely to be able to avoid liability for redundancy payments in this way. 




A mobility clause must not be exercised capriciously (United Bank Ltd v Akhtar [1989] IRLR 507) (see Chapter 3, page 75). And employers must not breach their obligations under the Equality Act 2010, including the duty to make reasonable adjustments and the obligation not to discriminate (see Chapter 7, page 231). 
 


In a new case in which an employer attempted to rely on a mobility clause to avoid making redundancy payments, Kellogg Brown & Root (UK) Ltd v (1) Fitton UKEAT/0205/16 and (2) Ewer [2017] UKEAT/0206/16, the dismissals were judged unfair because the mobility clause relied on was found to be invalid, meaning that the employer had no contractual right to instruct the employees to relocate. Since the instruction to relocate was unreasonable, the refusal to obey it was reasonable and the dismissals were unfair. In this case, the employer had sought to rely on the mobility clause to require a claimant with 24 years’ service and just a year short of retirement to add a 100-mile motorway round trip to his daily commute. The other claimant, who did not even own a car, would have faced a two hour commute each way. 


Reps need to take great care when faced with a mobility clause in the context of redundancies. As well as the risk of a finding that employees who refuse to relocate have been dismissed for refusing to obey a reasonable contractual instruction, there is also a risk that an offer of a new role in the new location will be “suitable alternative employment”, meaning that an unreasonable refusal of that offer would result in the loss of any redundancy payment (see Alternative work, page 395). 




Another significant case in the context of "place of work" redundancies is Exol Lubricants Limited v (1) Birch and (2) Perrin [2014] UKEAT/0219/14/KN. This case involved mobile workers — lorry drivers. The EAT suggested that if an employee’s place of work is uncertain, tribunals should look first at the contract, to check whether a place of work is identified, and then examine the surrounding circumstances. The place of work is often the place where employees are expected to attend to receive instructions, or in the case of a delivery driver, to load up their next delivery, suggested the EAT.