Relocation: the risks and pitfalls for employers

Due to changes in ways of working since the pandemic or in response to the economic slowdown, some employers are downsizing their premises and asking employees to relocate to new premises or hubs.

We take a look at the key contractual, redundancy and discrimination issues.

Contractual mobility clause

The employees’ contracts of employment may contain a mobility clause that allows the employer to change the place of work. The wording first needs to be carefully checked to understand the scope of the right.

Secondly, the employer’s right to insist on relocation may be curbed by the implied term of trust and confidence, which stops the employer acting in a way that seriously damages or could seriously damage the relationship between the employer and employee, without having a good reason.

A breach could allow the employee to resign and claim constructive dismissal if they have two years’ service.

Thirdly, an employer needs to enforce this clause in a reasonable way. Usually, that involves discussion with the individual and giving plenty of notice.

Finally, insisting on the employee relocating under a mobility clause must be done in good faith and not done in an ‘arbitrary, capricious or irrational’ way. Provided there is a business reason for moving the location this hurdle should be cleared.

Mobility clause and employee refuses

If the employee resists the move, even though the contract allows the employer to require the employee to relocate, the employer may have no option but to dismiss the employee for failure to obey a lawful instruction. If the instruction was reasonable and not in breach of contract, the dismissal for misconduct could be fair and the employee would not be entitled to a redundancy payment.

No mobility clause and workplace still operating

Where the existing workplace is not being closed but some employees are required to relocate, without a mobility clause the employer cannot insist on the employee relocating. The employer needs the employee’s agreement to the change through a consultation process. We can help you ensure that this consultation exercise covers all the necessary elements, including ways of mitigating the impact on the employee.

No mobility clause and close of workplace

If the trigger for the relocation is that the business will stop operating from the current premises, this is likely to fall within the statutory definition of a redundancy. There may be some uncertainty around the employee’s place of work, for instance if they work at two bases. We can discuss this with you.

Discrimination issues

The consultation exercise should address any individual circumstances that could create a discrimination risk. This could involve reasonable adjustments for a disabled employee or the impact of the move on childcare arrangements for a female employee. Employers need to be alert to these issues.

How we can help

A relocation programme can be disruptive and may create the risk of employment tribunal claims and loss of staff. We can help you ensure that it is well planned, and the risks are mitigated as far as possible, to minimise the negative impact on your business. For further information, please contact Linda Wilson in the employment team at MacDonald Oates Solicitors on 01730 268211 or email .

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.