Reward Insight
Danny Done, managing director at Portfolio Payroll, discusses how to handle this with your employees Business relocation
M oving business premises can be an exciting step for a company and one which can reflect its success if it has simply outgrown its original home. Despite this, a change in work location can mean a big change to the company’s employees, for whom the location of the workplace may have been a large factor in deciding where to look for employment. Human resources (HR) can therefore play an important role when a company relocates because the legal position may make the situation slightly trickier than first thought. The location where work is carried out is a term of employment which makes up part of the contractual arrangements between employer and employee. To change that location can mean that employers are changing a term of the employee’s contract and this requires agreement from the employee. From an employment law perspective and to identify the exact position in terms of requiring employees to move sites, the first step employers should take is to look at the contracts of employment. It could be that there is a clause in there called a ‘mobility’ clause which will stipulate that it is a condition of their employment that the employee must be prepared to work from other locations that are designated. Where the employee has signed their agreement to their contract of employment, this will mean that employers are entitled to invoke this clause and expect that staff will move within the limits stipulated in the mobility clause. This does not, however, give employers free reign to expect staff to move to the other side of the country the next day. A mobility clause must be ‘reasonable’ in its terms if it is to have any power. There is no definition of ‘reasonable’ and what
may be reasonable for one individual may not be for another and, frustratingly for employers, what is reasonable can only be determined by a Tribunal. If a mobility clause states that staff are expected to move to a new site within ten miles of the current location, then it is more likely to be considered reasonable than a stipulation of 100 miles. ...mobility clause must be ‘reasonable’ in its Asking employees to move a distance that is outside of the radius in the mobility clause or wanting the employee to move where there is no mobility clause in operation would constitute a variation to the terms and conditions of their employment. This can only be effected where there is agreement from the employee so a process should be used to obtaining this. Employees should be consulted with so that they are aware of what the employer is planning, giving them opportunity to consider the proposals and approach the employer with any concerns. If agreement is obtained then employers may proceed with the move or, if employees are consulted with and the employer receives neither agreement nor objection, then they can probably assume, after some time, that the employees have impliedly agreed to it. However, if an employee were to actively object to the change and it was still enforced, it may be open to them to leave the company and claim constructive unfair dismissal. This would mean the employer having terms if it is to have any power
to convince a tribunal that the business reasons for relocating to somewhere that is far away were good enough to warrant the change to the contractual place of work. A similar situation would occur if the employee did not voluntarily leave the organisation, but their current employment was terminated and they were simultaneously offered a new contract on the new terms i.e. at the new location. Although new employment has been offered, the current contract was still terminated, allowing the employee to claim unfair dismissal. Again, robust business reasons would be needed to convince a tribunal that the decision to move makes sense for the business. Relocation may also mean that current employees are redundant. If their job no longer exists at the current location and there are no suitable alternative positions available, then their entitlement to redundancy pay may arise dependent on their length of service. If redundancy did apply, the employer would need to enter into consultation with the employees otherwise risk an award at tribunal. If twenty or more employees are affected, collective redundancy provisions would need to be followed, including minimum consultation period lengths. If there are suitable alternative positions available, and these may be at the new location, the employee would be entitled to a four-week trial in the new position. Employers are not obliged to pay relocation costs unless this is included covering some costs, such as temporary accommodation, moving expenses or reimbursing money spent on travel to the new location until they managed to move house. n in the employees’ contracts. Even so, employers may wish to consider
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Issue 25 | November 2016
| Professional in Payroll, Pensions and Reward |
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