Mobility clauses can be a blessing and a curse. If drafted carefully and with thought, they can assist an employer to maintain its workforce if the workplace has to change location and so provide certainty in this regard. However, if the wording is drafted too widely, is unreasonable or the employer fails to adequately consider the effect of the relocation on its workforce, then the result could be unfair dismissal claims or potential statutory redundancy payments.
Here we consider the effect of mobility clauses, employees’ rights and obligations in relation to relocation and what employers can do to increase the possibility of mobility clauses being effective and enforceable.
What is a mobility clause in an employment contract?
A mobility clause in an employment contract is a provision that requires the relevant employee to relocate if required to do so by their employer. This may be due to the closure of an office or workplace or a change in the work carried out at a particular location or for another reason.
Are mobility clauses enforceable?
An employee has to comply with a mobility clause provided that it is reasonable. Whether it is reasonable or not will depend on the circumstances and also on the individual employee’s circumstances. Factors which may be taken into account in assessing reasonableness may include whether the relocation is a ‘reasonable distance’ or not, the amount of notice that the employer has given to the employee about the change in workplace, whether the employer has offered to pay relocation costs or fuel costs, the relevant employee’s role within the organisation, the employee’s personal circumstances, the wording of the mobility clause and so on. Although there are no hard and fast rules governing what would be ‘reasonable’ for each of these, there are some guidelines which should be considered by employers.
What is meant by ‘reasonable distance’?
A ‘reasonable distance’ in relation to the relocation will depend on the individual circumstances of the business, the reason for the move and the individual circumstances of the affected employees. For example, moving five minutes down the road is likely to be considered as ‘reasonable’ as it would not make a large difference to any employee’s commute time. However, expecting employees to commute for an additional two hours a day may well be ‘unreasonable’ as this could seriously affect their homelife and incur considerable extra cost. If employees are expected to commute for longer, employers could compensate for this by allowing them to work from home for one or two days a week or reduce their hours for a specified period.
What is a ‘reasonable’ amount of notice?
Again, what is a ‘reasonable’ amount of notice will depend on the circumstances. Relocating a short distance away will not require as much notice as relocating to a town 300 miles away. It is advised that an employer gives as much notice as possible to their employees and that adequate consultation and discussion are undertaken.
Relocation and other costs
Employers can also consider contributing to employees’ relocation costs and may be obliged to do so if the contract of employment provides for this. This could include, for example, contributing to rental costs, moving costs, or if the relocation is overseas, to flight costs. If the employee decides not to move but to take on a longer commute, employers could consider paying additional fuel costs or toll charges at least for a period of time to ease the burden.
Employee’s role within the organisation
When requesting an employee to relocate pursuant to a mobility clause, employers should consider the role of the relevant employee within the organisation. Moving someone in a senior management position who has worked in various locations and travels regularly as part of their role may be more ‘reasonable’ than expecting a factory floor worker who has only ever worked in the same place to relocate.
Employee’s personal circumstances
Employers must consider each of their employee’s personal circumstances in terms of the relocation, as this will have a bearing on whether it is ‘reasonable’ to invoke the mobility. Some employees, for example, may have dependents which would make a longer commute particularly difficult for them.
The wording of the mobility clause
Care should be taken when including a mobility clause into any employment contract to ensure that it is worded correctly and with thought. A widely drafted mobility clause potentially allowing an employer to move an employee anywhere for any reason is likely to be considered as too unreasonable to be enforceable. However, a narrowly-worded mobility clause which takes into account the organisation’s business and genuine reasons for a relocation is more likely to be considered reasonable and enforceable and will be more helpful to the employer in the event of an unfair dismissal claim against them.
It is advised to take legal advice on this and not to insert standard mobility clause wording into all employment contracts as a matter of course; different employee roles and seniority levels may require different wording.
What if an employee refuses to move?
An employee who unreasonably refuses to move despite having a mobility clause in their employment contract could be dismissed for misconduct on the basis that they have refused to follow an instruction. That said, dismissing an employee in this way could result in their bringing an unfair dismissal claim against the employer if they feel that their refusal was reasonable or that the mobility clause or request to move was unreasonable. Employers should therefore be extremely careful about how to deal with an employee who refuses to move in breach of a mobility clause and legal advice should be sought.
Thoughtful dialogue with the employee may discover the real reason behind the employee’s refusal, which may allow the employer to offer terms or incentives which will allow the employee to agree to the move. At the very least, discussing the position with the employee may provide more information to the employer about the employee’s personal circumstances, which may then help to determine whether their refusal is reasonable or not.
What if there is no mobility clause in the employment contract?
If there is no mobility clause in an employee’s employment contract, they are under no obligation to relocate. That said, it is always worth having a discussion with such employees as they may be willing to move anyway; this will often depend on the details of the relocation, the terms that the employer can offer them if they agree to move and their personal circumstances.
Mobility clauses and redundancy
A redundancy situation may arise if an employer wishes to relocate but an employee does not have a mobility clause in their employment contract and does not wish to move or the employee does have a mobility clause but the employer decides to follow the redundancy route instead.
Case law has shown that employers should not swap between redundancy and invoking a mobility clause when considering relocation. It is therefore important for employers to decide at the start of the relocation process whether to invoke a mobility clause or begin a redundancy exercise and this may require legal advice before taking any further steps. Dismissal for misconduct on the basis that an employee unreasonably refused to relocate despite having a mobility clause in their employment contract could, potentially, be cheaper than a redundancy exercise, but the employer needs to be sure that their relocation request was actually reasonable in the circumstances, which should take into account the relevant employee’s personal situation.
If a redundancy situation does arise, the employer must try to offer the affected employee(s) ‘suitable alternative employment’. This may well be at the new location and whether or not it is ‘suitable’ will depend on the particular circumstances. If an employee unreasonably refuses the offer of ‘suitable alternative work’ they can be dismissed for reasons of redundancy but will not be entitled to receive statutory redundancy pay. However, if their refusal is reasonable, the affected employee may be entitled to receive statutory redundancy pay if they meet the relevant criteria (for example, they have been employed by the employer for the requisite period of time).
Takeaways for employers
Consider whether your employment contracts should include mobility clauses if they do not already. They can be helpful clauses, providing you with some control and an element of certainty if there is a chance that you may need to utilise such a clause in the future.
Review the wording of the mobility clauses included in your contracts of employment. Are they sufficiently narrow and certain? Are they tailored to a situation which is likely for your business? If not, consider rewording them.
If you are considering a relocation, think carefully about the circumstances and, to the extent you can, your employees’ individual circumstances. Put together a relocation package for the affected employees which may ease the burden and stress of any move. Check the relevant employment clauses to determine if you have any relocation contractual obligations, such as paying for certain costs.
If you are considering enforcing mobility clauses where employees are reluctant to move, consider the long-term effects. Would a disgruntled employee affect morale within the business? Is it worth forcing someone to relocate who has no enthusiasm for it?
Provide as much information as soon as possible to any employees who may be affected by a relocation, whether or not their employment contracts include a mobility clause. Discussion and openness are key.
Think carefully about enforcing mobility clauses and whether redundancy may be a better option before you make any announcements to employees. Can you offer ‘suitable alternative employment’? What is your redundancy policy? What would be the cost of paying statutory (and enhanced, if relevant) redundancy pay? Take legal advice if you are unsure.
DavidsonMorris are employer solutions lawyers. We help employers with all aspects of personnel and workforce management and development, including the rights of employees when varying contractual terms. We provide pragmatic advice aimed at protecting your best interests while managing legal risk. If you have a question about the use of mobility clauses or any form of change to contractual terms or working arrangements, speak to us.
Mobility clause FAQs
What is a mobility clause?
A mobility clause is a provision in an employment contract which allows the employer to oblige the employee to move if required, either on a permanent or temporary basis.
Can an employer make an employee move location?
Yes, if it is reasonable. This depends on the wording of the mobility clause, the relocation terms and the employee’s circumstances. If an employee refuses to relocate, they could be dismissed for misconduct. This, however, should not be undertaken lightly.
What is classed as reasonable travelling distance?
A reasonable travelling distance will depend on individual circumstances. For example, a travelling salesman without dependents may be expected to travel further than an employee with young children who has always worked from the same place.
Last updated: 6 April 2020