In this case, the employer was successful in arguing that the dismissal of two employees who refused to move offices upon a workplace closure was due to their conduct as opposed to redundancy. However, the EAT still found that the dismissals were unfair. The mobility clause in the employees’ contracts had been too widely drafted, meaning that the instruction to relocate was unreasonable and the claimants had reasonable grounds to refuse.
The company decided to close one of its offices and to move all the employees to their other office on the opposite side of London (about 30 miles away).
The company told the employees that it was entitled to move them, relying on the following mobility clause:
‘…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.’
The claimants refused to move, and as a result they were summarily dismissed for unacceptable conduct. They brought claims for unfair dismissal and redundancy payments.
The tribunal initially found that the real reason for the dismissal was redundancy, and that the dismissals were unfair as a redundancy process had not been followed.
On appeal, The EAT focussed on what the company believed to be the reason for dismissal at the time of the decision, which was the claimants’ failure to follow a reasonable management instruction under an enforceable mobility clause. The EAT found that this was therefore the correct reason for the dismissal, and the claimants were not therefore entitled to a redundancy payment.
However, the EAT also decided that the instruction to move offices was neither a valid contractual requirement nor reasonable, and it considered that the claimants had acted reasonably in refusing to comply. Insufficient steps had been taken to minimise the impact of the move on the claimants, and the dismissal was therefore unfair.
This case is an important reminder to employers not to place an overreliance on the written terms of a contract. They should always be mindful of the implied term of mutual trust and confidence, and this requires them to act reasonably towards employees even when seeking to enforce contractual terms. In this case, the employer should have taken greater steps to assess the impact of the relocation on its employees, and explored more fully how it could reduce the potential impact.
The case also highlights the importance of having clear and precise employment contracts, and to ensure that provisions such as mobility clauses are sufficiently restricted so as not to be found unenforceable by the tribunal.