REDUNDANCY - 07.02.2008

Relocation, relocation

Relocated or redundant?

If you dismiss an employee because they won’t relocate to new premises, this is a redundancy, even though their current job is still available on the same terms and conditions (except for place of work, obviously). In determining whether they are entitled to a redundancy payment, the questions to ask are firstly, where they were employed to work and, secondly, whether they have unreasonably refused an offer of suitable alternative employment. There’s usually no difficulty in establishing place of work - in most cases, it will be where they work on a daily basis.

What if there’s a mobility clause?

Where there’s a mobility clause in the contract, tribunals will determine where they work as a matter of fact, and not where, geographically, they could be required to work under the clause.

Still important. If an employee has moved from place to place during employment, a mobility clause may be important in determining the factual place of work. Also, if a mobility clause is invoked but the employee refuses to move, you might be able to avoid making a redundancy payment by demonstrating that the reason for dismissal was misconduct and not redundancy, i.e. refusing to obey a management instruction. Finally, the existence of a mobility clause may be relevant to the issue of whether the employee has unreasonably refused an offer of suitable alternative employment at the new workplace.

Unreasonable refusal

An employee who is made redundant loses their right to a redundancy payment if they unreasonably refuse an offer of suitable alternative employment. The offer must: (1) be made before the end of their employment under the previous contract; (2) be oral or in writing; (3) take effect either immediately on the end of the employment under the previous contract or after no more than four weeks; and (4) be either on the same terms and conditions as before or suitable employment.

Tip. If an employee turns down an offer to move to new premises, you can argue they aren’t entitled to a redundancy payment because they have unreasonably refused an offer of suitable alternative employment, i.e. their current job in a different location.

Proximity. There are no rules on how close the new premises have to be to avoid liability to make redundancy payments - it will depend on the nature of your industry, the employee’s mode of transport, travel costs and travelling time, their family circumstances, whether there was a mobility clause, etc. A change of workplace is unlikely to make a job unsuitable even if the new workplace is some distance away, so it will generally be the employee’s reasonableness of refusal that is at issue.

Consult

Individual consultation about the relocation should take place as soon as possible. This might be months in advance but should start as soon as redundancy is a possibility. In addition, because in theory, all staff could refuse to move and would need to be made redundant (albeit unlikely in practice), if there are 20 or more you are also under collective consultation obligations, e.g. consultation with workforce representatives.