Mobility Clauses: too wide to be enforceable

Background

In the case of Kellog Brown & Root Limited v Fitton and Ewer, Mr Fitton and Mr Ewer (the “Claimants”) were employed by Kellogg Brown & Root Limited (the “Respondent”). Their contracts of employment contained a mobility clause which provided that: “The location of your employment is Greenford 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”.

The Claimants had worked for the Respondent at its Greenford site for 11 and 25 years respectively. The Respondent decided to close the Greenford site and rather than initiating a redundancy process, chose to invoke the mobility clause in the contracts of all its employees and require them to move to the Respondent’s office in Leatherhead. This would have increased the commuting time of one of the Claimants from 18 miles to 47 miles each way.

As a result the Claimants refused to move due to the substantial increase in commuting time that this would involve. As a result, they were subject to a disciplinary process before being dismissed for failing to show up to work. Both brought claims for unfair dismissal.

At first instance the Employment Tribunal held that the reason for the dismissal was redundancy, as the Claimant’s workplace had closed and the Respondent had incorrectly applied the disciplinary process. As a result they had been unfairly dismissed and were awarded statutory redundancy. The Employment Tribunal also commented that if the reason for dismissal was not redundancy but conduct, then the dismissals were unfair as the mobility clause was too wide and the Respondent had acted unreasonably.

The Respondent subsequently appealed and the question for the EAT was what was the reason for dismissal and if the reason was conduct, were the dismissals fair.

Employment Appeal Tribunal

The EAT allowed the appeal against redundancy as they found that the reason for the dismissals was not for redundancy, but was for the Claimants conduct in failing to carry out an instruction, and was therefore conduct.

When considering whether the dismissal was fair or not the EAT applied a three stage test:

  1. Whether the instruction was lawful;
  2. Whether the Respondent had acted reasonably in giving that instruction; and
  3. Whether the Claimants had acted reasonably in refusing to comply with that instruction.

The EAT found that the Claimant’s had been unfairly dismissed because:

  • the mobility clause was too wide to be enforceable;
  • the Respondent’s instruction was unreasonable given the increased travelling time; and
  • due to their personal circumstances, the Claimant’s both acted reasonably in refusing to comply with the instruction as the change was substantial for both of them and the Respondent had taken no steps to mitigate the impact.

Comment

There are several lessons to be learned by employers as a result of this case. Firstly when closing an office, consider whether it is a redundancy exercise or whether to invoke a contractual mobility clause. The EAT has confirmed that a mobility clause is fair and can be relied upon provided it is reasonably relied upon and it is not too wide. Therefore if the exercise is relocating employees to another office not too far away and with good transport links, it is likely that you will be able to rely on the mobility clause. However, regardless, reasonable notice of the relocation must be given and an employer should look at effective ways of mitigating the impact on staff.

Secondly when drafting a mobility clause, make sure it is no wider than is necessary. If you are going to seek to rely on it, the more restricted it is the likelier it is to be considered lawful.

Finally, you must have regard to each individual employee’s circumstances and consider employees on a case-by-case basis. Make sure that any actions taken are reasonable. It is worth noting in this case that one of the employees did not have a car so was unable to commute and the other was due to retire a year later.

If you need help drafting a mobility clause or want us to review and provide advice on an existing mobility clause, please contact the Devonshires Employment Team.

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