Top issues to consider when relocating employees

25 / 02 / 2020

In a speech to the Royal Television Society Cambridge Convention, director general of the BBC Tony Hall outlined his vision for increasing the broadcaster’s geographical diversity. The plan includes relocating more than 3,000 employees outside of London, with many headed for the north of England. So what are the key challenges of implementing such a large scale relocation?

General employee resistance

Regardless of an employer’s commercial rationale or right to impose such change, it is impossible to ignore the personal impact relocation can have on staff. For many, a move can make an already long commute intolerable. Where the relocation involves moving to another city altogether, this may be a step too far for many employees who might have to move house, change their children’s school, ask their partner to find a new job and move away from friends and family.  

When Channel 4 moved around 300 staff out of London, some departments saw up to 90 per cent of employees seeking redundancy rather than relocate. Employers therefore need to appreciate they are likely to experience a degree of attrition and may lose some very skilled people.

Does a contractual right to relocate help?

Most employment contracts will contain some form of wording, commonly known as a mobility clause, that permits an employer to relocate employees. This often helps negate the need to run the relocation as a place of work redundancy. Mobility clauses must, however, be treated with caution and exercised in a reasonable manner to avoid breaching the mutual duty of trust and confidence in the employment relationship. 

Case law dictates that businesses should, as a minimum, explain to employees the reasons for the change in location and give them reasonable notice of when the change will take effect. Whether the exercise of a mobility clause is reasonable or not will be a matter of fact.

Specific rights of individual employees will vary depending on the terms of their contracts. Employers seeking to rely on mobility clauses should consider whether it is reasonable to offer financial or other assistance to employees being relocated. 

Should an employee refuse to comply with a mobility clause, employers may be able to dismiss based on their refusal to obey a lawful instruction. However, such a decision could expose the employer to a potential unfair dismissal claim.

Redundancy  

In the absence of a mobility clause, and if an employee does not wish to relocate voluntarily, employers run the risk of someone claiming breach of contract and unfair dismissal. This situation ultimately leaves employers with little choice but to implement a redundancy process, offering the new location by way of alternative employment. Where this could lead to 20 or more employees being made redundant within a 90-day period, companies need to be aware of their collective consultation obligations.   

Should an employer proceed with relocation?

A nearby relocation will usually be uncontroversial even without a mobility clause. However, moves further afield are likely to pose a challenge. As part of the wider commercial decision it is important to consider:

  • Mobility clause: what does the contract state?
  • Impact on employees: what will be the additional commute/cost?
  • Attrition: will there be a significant number of employees who will not move?
  • Financial incentives: is it possible to offer payments to cover any financial losses that may be incurred, such as additional travel costs?
  • Termination payments: calculate potential redundancy and notice payments.
  • Risk of litigation: how contentious is the decision to relocate? 

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