In an article first published by Thomson Reuters, Managing Associate, Annabel Mackay, considers Brexit, the rise of the Euro-commuter and the legal issues that employers need to think about before asking employees to commute to work outside the UK.
As the financial services sector grapples with implications of the Brexit vote, there have been reports of large-scale relocations, redundancy exercises and even the prospect of employees being asked to commute from the UK to Continental Europe. The last decade has seen the rise of the Euro-commuter, buoyed by cheap air and train fares.
However, there have been reports that this trend comes at a personal cost, affecting emotional well-being and family life. It is also an option that may not be open to large sections of the workforce, whether for domestic or health reasons. Employers must therefore consider carefully the implications of requiring greater mobility on the part of their workforce in order to avoid claims arising in the short and the long-term.
It is common practice for employers, particularly in financial services, to reserve a clear and unequivocal right to require their employees to travel on their employer's business or to relocate, whether on a temporary or permanent basis. These clauses put employers in a good position to embark upon mobility initiatives but they are not the end of the matter. In cases involving permanent moves, the courts have implied terms which have constrained the way in which such clauses have operated.
Employers are expected to give reasonable notice of any move and the way in which the clause is exercised must not destroy trust and confidence. If an employee is being asked to commute to Continental Europe on a regular basis, perhaps staying away from home for the whole week, the same considerations will be relevant.
Employers will also need to consider whether such a requirement has an adverse impact on employees with "protected characteristics". In Meade-Hill and another v. The British Council, the Court of Appeal found that the requirement to relocate anywhere in the UK had the potential to operate as a condition or requirement with which fewer women than men could comply.
It was accepted that a greater proportion of women than men were secondary wage earners and would therefore have more difficulty in meeting the requirement to relocate. The employer was required to justify the need to be in the position, at any point in the future, to invoke the clause.
The same approach is likely to be followed where an employer requires employees to accept a lengthy commute as an alternative to a permanent relocation. We can assume that tribunals will still accept that women bear the greater burden of childcare (as evidenced by the limited take-up of shared parental leave) and are more likely to be adversely impacted.
An employer is unlikely to have difficulty in finding a genuine business reason for their requirement to commute internationally. The challenge will be demonstrating that its approach is proportionate, having regard to the business objective and the detrimental impact on those with family responsibilities.
Employees with physical or mental impairments could also find an extended journey particularly difficult, so any requirement to commute internationally (even if permitted by the contract) would need to be assessed against the employer's duty to make reasonable adjustments.
There have been cases, in the context of redundancies and suitable alternative employment opportunities, where it has been reasonable for employees to reject posts with extended commutes where this would exacerbate pre-existing health problems. For example, an employee who suffered from claustrophobia was entitled to refuse a post which would have involved a thirty minute bus ride rather than a walk to work.
Putting equality obligations to one side, a report by the Office for National Statistics in 2014 found that commuting could have a detrimental impact on personal well-being. On average, commuters have a greater sense of anxiety and lower satisfaction than non-commuters. Commuters with longer commutes (up to three hours) have a more negative experience than those with shorter commutes.
Although the study found that after three hours, the negative effects disappeared, an employer should give consideration to the health and safety risks associated with long commutes and whether any steps could be taken to mitigate that detrimental impact.
An employer that wishes to introduce a material change to employees' working arrangements (in terms of the level of travel/place of work) will need to go through a careful communication and consultation process. The change may be permitted by the contract but it is important to ensure that employees are given reasonable notice of the proposals and have a chance to make representations in order to identify any potential issues such as those outlined above in relation to personal and family circumstances. The employer also needs to consider how any objections will be handled.
If the employer intends to dismiss employees who do not agree with its proposals, collective consultation obligations may be triggered. Employees may also be entitled to a redundancy payment. The case law on place of work redundancies focuses on where the employee actually works rather than where they can be required to work under the contract.
Some employers choose to invoke the flexibility clause as a means of avoiding a redundancy situation and may dismiss employees for failure to comply with a reasonable instruction. If that approach were adopted, the court would assess the reasonableness of the instruction by examining the extent of the managerial discretion in the contract. It would also consider the employer's communication of the change, the employee's reasons for refusal and whether alternatives were explored.
An employer who approaches dismissals on the grounds of conduct or some other substantial reason may find this challenging. The employees are likely to argue that a redundancy situation has arisen (because the practical effect of the change is that they no longer have a fixed place of work) and that, depending on the numbers affected, the employer should have consulted collectively.
If the employee accepts the change and starts to spend a considerable proportion of their working week overseas, the question arises whether they lose the benefit of employment law protections in the home location. Recent case law on rotational commuters has demonstrated that the test is whether the employee retains a substantial connection with Great Britain.
If however the employee is spending a significant amount of time working in a different location on a regular basis, local tax, immigration and employment implications would also need to be assessed.
It is therefore not a straightforward solution to propose commuting as an alternative to downsizing or relocating an employee's operations. Employees may find it difficult to adapt to such a change having regard to their personal circumstances, particularly those with health problems and family responsibilities. The longer-term impact of an extended commute from a health and safety perspective would also need to be assessed.
Research by recruiters suggests that employees with long commutes are more likely to leave their jobs than those with shorter distances to travel to work. If an employer considered that it was still in its interests to proceed with such a dramatic change, a careful strategy would need to be devised to avoid potential claims. This would have to factor in a period of consultation with staff, and, depending on the employer's approach, collective consultation.