The Limits of Express Mobility Clauses in Workplace Relocations

In Kellog Brown & Root (UK) Ltd v (1) Fitton and (2) Ewer, the employer was found to have unfairly dismissed two employees when it sought to rely on contractual mobility clauses to relocate them from Greenford to Leatherhead instead of making them redundant.

The Facts

Mr Ewer had worked for Kellog Brown & Root (KBR) for 25 years and Mr Fitton had worked for KBR for 11 years. Both worked in its Greenford premises. In 2015, KBR decided to close its Greenford premises and relocate all employees based there to Leatherhead. For Mr Fitton, this meant his 20 minute commute each way would increase to 2 hours each way. For Mr Ewer, who turned 65 in 2015, his commute increased from 18 miles each way to 47.

Both had a clause in their employment contracts stating, "The location of your employment is … but the company may require you to work at a different location including any new office location of the company either in the UK or overseas either on a temporary or permanent basis.  You agree to comply with this requirement unless exceptional circumstances prevail."  KBR said that as a result of that clause, their roles had not become redundant because it was entitled to require them to relocate.

During the consultation process, the employees said they should be made redundant, referring to the added difficulty of their commutes and length of service and Mr Ewer said that in his final year of employment he should be easing down, not being put under greater pressure. In response KBR said that it had consulted with staff and put in place various provisions to mitigate the effects of extended commuting times (for example flexible working, adjusting core hours and providing financial assistance).

KBR therefore said that it was entitled to enforce the mobility clause. It said that age and service were not 'exceptional circumstances' under the last line of the clause. It appears that KBR did treat some employees with childcare commitments or elderly parents as being in exceptional circumstances and dismissed them with the equivalent of a redundancy payment.

When Messrs Fitton and Ewer refused to move, they were invited to disciplinary meetings and dismissed for misconduct for refusing to comply with a reasonable instruction.

Employment Tribunal Decision

The Employment Tribunal said that because KBR was closing the Greenford premises, this had to be a redundancy situation and KBR was wrong to rely on its mobility clause to say that it was not. It therefore held that the real reason for dismissal was redundancy not misconduct.

The Tribunal also held that:

• The mobility clause lacked certainty and was very widely drafted and that KBR had allowed for little or no individual difficulties with complying with it
• The instruction to relocate was unreasonable for both Claimants because of the greatly increased travelling time and that the limited steps KBR had taken to alleviate some of the disadvantages of a longer commute were of no significance in the Claimants’ cases
• KBR followed a flawed procedure because it did not consult or warn affected employees or search for alternatives,  consider offers of suitable employment or trial periods, all of which would have been required in a redundancy situation
• In Mr Ewer’s case, the dismissal of a loyal employee with 25 years’ service was outside the range of reasonable responses and
• Both dismissals were unfair

Employment Appeal Tribunal (EAT)

The EAT noted that an express mobility clause is subject to an implied requirement to give reasonable notice and that the employer must not exercise its discretion under such a clause in a way that makes performance of the employee’s duties impossible.

The EAT said that in this case, the Tribunal should have asked what it was that KBR genuinely had in mind as the reason for dismissal. The EAT noted that in its judgment the Tribunal held that KBR had genuinely and honestly believed that it could rely on the mobility clause, but the Tribunal disagreed with KBR's belief.

The EAT therefore found that the reason for the dismissal was not redundancy but misconduct so no statutory redundancy payment was due.

In practical terms however, that decision was of little help to KBR because the EAT also upheld the Tribunal's decision that the dismissals were unfair. The relocation clause was too broad and KBR had not acted reasonably when implementing it.

Best Practice

The key practical points for businesses to bear in mind when they have express mobility clauses in their employment contracts and are considering closing one premises and relocating employees to another are:

1. In the vast majority of cases it is up to you whether to seek to rely on the mobility clause to avoid a redundancy situation or not rely on it and treat the office closure as a redundancy. However, you have to pick one option and stick to it, not move back and forth between the two.
2. When consulting with employees over the proposed relocation, it is vital to engage with individual employees' specific circumstances and difficulties rather than taking a blanket approach.

For further information, please contact Bob Fahy on 01923 919 302.