Employer's attempt to enforce mobility clause in redundancy situation led to unfair dismissal

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The EAT has held in Kellogg Brown & Root (UK) Ltd v (1) Fitton (2) Ewer that an employment tribunal had been wrong to find that two employees were dismissed for redundancy in circumstances where the employer sought to rely on a contractual mobility clause to move them to another office when their workplace closed down. The real reason for the dismissals was the employees’ conduct, i.e. their refusal to obey the employer’s instruction to move under the mobility clause. However, the EAT upheld the tribunal’s decision that dismissing the employees in these circumstances was unfair.

Case background

The claimants in this case had worked for the employer at its Greenford office for 11 and 25 years respectively. Their employment contracts included a mobility clause which stated that the employer could require them ‘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’ and that they agreed to comply with this requirement ‘unless exceptional circumstances prevail’. In April 2015, the employer decided to close its Greenford office and told employees that they would be required to move to its Leatherhead office at the end of June. When the claimants refused to move because of the substantial increase in commuting time this would involve, they were called to disciplinary hearings, following which they were summarily dismissed.

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The claimants claimed that their dismissals were unfair and that they should have received statutory redundancy payments. An employment tribunal found that the reason for dismissal was redundancy as the claimants’ workplace had closed, and the dismissals were unfair because the employer had wrongly applied a disciplinary process which was inappropriate in a redundancy situation – the employer had also failed to consult or look for suitable alternative roles for the claimants. The claimants were accordingly entitled to statutory redundancy payments.

The tribunal also considered what the position would be if the reason for the dismissals was not redundancy but conduct, i.e. the claimants’ refusal to obey the employer’s instruction to move to Leatherhead under the mobility clause. The tribunal found that the mobility clause was very widely drafted and allowed for little or no individual difficulties in complying. In the tribunal’s view, it was not legitimate for the employer to simply decide for itself what ‘exceptional circumstances’ would be. For example, while the employer had allowed certain employees with childcare responsibilities to leave employment with a redundancy payment under the mobility clause’s exceptional circumstances provision, it had not accepted that either of the claimants’ circumstances were exceptional, even though one of them had no car so would have difficulty travelling to Leatherhead and the other was very close to retirement. The tribunal also considered that the instruction was unreasonable because of the greatly increased travelling time the move would involve for both claimants. Although the employer had made some effort to reduce the impact (e.g. by providing a contribution to offset increased travel costs and reducing core hours to allow travel outside of peak times on the M25), this was of no significance to the claimants. The dismissals were therefore unfair.

The employer appealed to the EAT.

EAT decision

The EAT held that the tribunal had been wrong to find that the claimants were dismissed by reason of redundancy. A tribunal must determine the reason for dismissal on the facts based on what the employer genuinely believed. In this case, although there may have been a redundancy situation, it was clear from the tribunal’s findings that the employer believed it had a right to instruct the claimants to relocate under the mobility clause, and it was their refusal to obey that instruction that led the employer to determine that they should be dismissed. Since the real reason for dismissal was not redundancy but conduct, the claimants were not entitled to statutory redundancy payments.

However, where an employer seeks to rely on a mobility clause, the fairness of a subsequent dismissal will depend on whether the instruction was legitimate, i.e. capable of being given under the contract of employment; whether the nature of the instruction was reasonable; and whether the employee’s refusal to comply was reasonable. The EAT agreed with the tribunal’s alternative findings that the instruction to move to Leatherhead was neither legitimate nor reasonable and that the claimants’ refusal was reasonable. It therefore upheld the tribunal’s decision that the dismissals were unfair.

Comment

An employer will not necessarily be prevented from relying on a mobility clause in a redundancy situation. If an employer wishes to do so, however, it should make this decision at the outset and make clear to employees that this is what it is doing. In those circumstances, the employer should not conduct a redundancy process but should follow an appropriate procedure to implement the mobility clause. An employer that first conducts a redundancy process and only later seeks to argue that it was entitled to require employees to move under a mobility clause will be judged harshly by the tribunal – as the EAT made clear in the earlier case of Curling and Others v Securicor Ltd 1992 IRLR 549 EAT, an employer cannot ‘dodge between the two… and hope to be able to adopt the most profitable at the end of the day’.

For employers wishing to rely on a mobility clause against the background of a redundancy situation, this case is a useful reminder that the terms of the mobility clause are likely to be scrutinised closely by the employment tribunal and the employer must take care that it acts reasonably if it wants to avoid liability for unfair dismissal. In this case, the tribunal’s decision that the employer could not reasonably rely on the mobility clause was influenced by a number of factors – namely, the extent to which the claimants’ commuting time would have increased (e.g. from 18 miles to 47 miles each way for one of the claimants); the fact that one of the claimants was very close to retirement; and the insignificance to the claimants of the mitigating measures taken by the employer (e.g. one of the claimants did not have a car, so reducing core hours to avoid traffic on the M25 did not assist him).

How can EEF help?

Members can find further information on changing terms and conditions and dealing with redundancy situations on our website – click here.

We will also be looking at the potential impact of other recent employment law cases at our upcoming EEF Employment Law Update. For further details, or to book a place, click here.

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Senior Legal Adviser

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