Workplace closure was not a redundancy situation

The Employment Appeal Tribunal has held in the case of Kellogg Brown & Root v Fitton and Ewer, that there was no redundancy situation, despite there being a workplace closure because the employer could rely on the mobility clause in the employee’s contract.

In this case, two employees were dismissed as a result of being unwilling to extend their commute by 20-30 hours a week to accommodate the workplace closure. The employees brought claims for unfair dismissal and redundancy payment.

The employer relied on a broadly worded mobility clause which required the employees to relocate, if necessary, within the UK or elsewhere, including to any new office location of the company in the UK or overseas.

The Employment Tribunal held that the employees were unfairly dismissed as a result of redundancy. However, the Employment Appeal Tribunal (EAT) overturned this decision on appeal.

The EAT held that there was no redundancy dismissal as the employer believed that it could rely on a mobility clause to relocate staff, and that it’s instruction to relocate was reasonable. The EAT said that the correct approach would have been for the Employment Tribunal to ask what the employer genuinely had in mind as to the reason for dismissal at the relevant time. In this case, it was misconduct arising out of a failure to obey a reasonable instruction.

Nonetheless, the EAT concluded that the dismissal was still unfair dismissal because the mobility clause was too widely drafted and had been unreasonably invoked by the employer. In these circumstances, the employees could reasonably refuse to comply with the instruction to relocate.

Where an employer seeks to rely on an express mobility clause in a workplace closure situation tribunals will consider whether it is reasonable to do so on a case by case basis. Employers should, therefore, ensure that such clauses are carefully drafted, unambiguous, and used appropriately. Sufficient notice should be provided to employees of any planned relocation, and their personal circumstances should be considered and, where practicable, assistance to relocate should be provided.