The EAT has held that two employees with contractual mobility clauses who refused to relocate were dismissed for misconduct, not redundancy, but that the dismissals were unfair.
Mr Fitton and Mr Ewer had been employed by Kellogg Brown & Root ("Kellogg") at its Greenford site for 11 years and 25 years respectively. In April 2015, all employees were told that the Greenford site would be closing, and they would be relocated to the Leatherhead site at the beginning of July. This relocation would mean an increased commute for Mr Fitton and Mr Ewer of between 20 and 30 hours a week. Mr Ewer was 64, and intending to retire the next year. He had lived near the Greenford site throughout his employment, and could walk or take the tube into work in twenty minutes. He did not own a car.
The employment contracts of both employees contained a mobility clause stating that:
"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."
Both employees explained why, because of their personal circumstances, they did not wish to relocate. After meetings and written communication between Kellogg and the employees, the employees were instructed to attend the Leatherhead site when their teams relocated. Neither employee did so.
Mr Fitton and Mr Ewer were invited to disciplinary hearings to discuss their "alleged unacceptable conduct", this being:
A failure to attend Leatherhead offices.
Failure to notify their manager of the above absence before 9am.
Refusal to comply with the employer's instructions to relocate and as a consequence failure to obey a lawful instruction of the company.
Disciplinary meetings were held by telephone, with each employee explaining why they would not relocate. Mr Ewer explained that he would have to get up at 4.00am so as to miss the traffic, and said it was unreasonable to expect him to travel a three hour journey each way, that he was about to turn 64, and was retiring the next year. He said that, had he been ten years younger, he would have moved to Leatherhead. Mr Fitton complained that the travelling time to Leatherhead was excessive.
Kellogg summarily dismissed both of them for misconduct for refusing to comply with a lawful instruction (to relocate). They were not paid either statutory redundancy pay or for their notice. They both brought claims of unfair dismissal.
The employment judge held that the mobility clause was very widely drafted and lacked certainty. The instruction to work in Leatherhead had been unreasonable given the greatly increased travelling time. Kellogg had been taking steps to alleviate the wider commute (for example, reducing core hours, short term compensation for additional travel costs, and flexible working options) but these steps did not help Mr Fitton and Mr Ewer. In particular, Mr Ewer's refusal to move was not unreasonable given how close he was to retirement, the substantial increase in travel time, and his lifelong connection to where he was living.
The employment judge held that the reason for the dismissal was not serious misconduct, but redundancy and therefore that following a disciplinary procedure was procedurally flawed, given that the reason for the dismissals was redundancy. Accordingly, the dismissals were unfair. Kellogg appealed.
The EAT scrutinised what the employment judge had said about the reason for the dismissal. The employment judge had said that the dismissals took place against the background of a redundancy situation, but they were not dismissed for redundancy but misconduct.
The EAT looked at whether (according to the tribunal's findings) the procedure had been fair. The EAT held that the tribunal had considered and determined the issues relevant to a conduct dismissal. These issues and determinations were:
Had the instruction to relocate been lawful, in the sense of being a valid contractual requirement? According to the employment judge, it had not. The mobility clause had lacked certainty, and it was very widely drafted so it was unenforceable.
Was the instruction reasonable? It was not. For both of the employees, the greatly increased travelling time made the instruction to attend at Leatherhead an unreasonable one. The limited steps that Kellogg would have taken to alleviate the disadvantages of a longer commute would have made no difference to these two employees.
The employees' refusal to travel to Leatherhead was not unreasonable.
Accordingly, the EAT found that the two employees had not been made redundant, and were therefore not entitled to statutory redundancy. It was accepted that their dismissals were related to their conduct and their dismissals were unfair.
This is not new law. Employers should be aware of the limited value of using mobility clauses when they are trying to avoid making employees redundant. It is not uncommon for employees to argue that they should be paid their redundancy entitlement (particularly where enhanced redundancy pay is at stake) rather than relocating under a mobility clause.
Employers who use a mobility clause to require employees to relocate (as was the case here) are positioning the reason for any dismissals as a failure to comply with a contractual obligation, rather than a redundancy dismissal. Employers taking this approach and who wish to succeed in defending an unfair dismissal claim need to be sure that:
The mobility clause is enforceable by being clearly and narrowly drafted. It will be harder to argue that a mobility clause requiring the employee to relocate anywhere in the UK or overseas is a valid contractual requirement.
They take into account the employees' individual circumstances and proactively offer ways of mitigating the situation which will assist the individual employees.
As an alternative employers can instead rely on arguments that the offer of a relocation is an offer of suitable alternative employment in a redundancy exercise and refer to the mobility clause to boost arguments about suitability. Employers are advised to decide whether to pursue the mobility route, or the redundancy route at an early stage.