In the case of Kellogg Brown & Root (UK) Ltd v. (1) Fitton UKEAT/0205/16 and (2) Ewer UKEAT/0206/16 the EAT upheld an appeal against a Tribunal's finding that two employees had been dismissed for redundancy when the company purported to use a mobility clause to move their working location, when their office closed.
When the company took the decision to close one of its two offices, it relied upon a clause in the Claimants' contracts (as below) to move employees to the other office.
"The location of your employment is … 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 employees were notified in April that they were required to move in June.
On taking advice, Mr Fitton told the company that he considered that he was redundant and entitled to a redundancy payment. He told the company that the mobility clause was unenforceable, he was not routinely required to travel and it was not a true condition of his employment. The company said that the mobility clause was to ensure retention of the workforce and continuity of delivery for clients. They considered that the availability of work at the other office location meant that no redundancy payment was available and that a refusal was a breach of contract. The company had taken a view only to offer redundancy payments in exceptional circumstances, including where employees had caring responsibilities for children or elderly relatives.
These exceptional circumstances were not considered to apply to Mr Ewer, who approached the company in a distressed state objecting to the additional travel and asserting that the mobility clause was not valid. He considered that after 25 years' service and approaching retirement he should not be increasing his daily commute by 29 miles each way, to a total of 47 miles each way. Mr Ewer also asserted that this was a redundancy situation. Mr Ewer was summarily dismissed after he failed to attend his new place of work. His internal appeal was dismissed.
The Tribunal found that the mobility clause was broad and lacked certainty. It found that the instruction to work at the other office was unreasonable, given the greatly increased commuting time. Steps which the company had taken to alleviate the longer commute were not considered significant to Mr Fitton and Mr Ewer, although they might have been for some employees. All the factors, including Mr Ewer's proximity to retirement and his lifelong connection to his prior working town needed to be taken into account when assessing the question of the increased travelling time.
However, on appeal the EAT disagreed. It found that the Tribunal had been incorrect to identify a redundancy situation. It should have asked itself what the company genuinely had in mind when dismissing the employees. Due to the fact that the company believed that the clause was enforceable, what it genuinely had in mind was the employee's failure to comply with its instruction. The EAT also felt that the Tribunal had lost sight of the mitigating steps the company had taken when reaching its decision.
Regardless of its finding that the Tribunal had erred in identifying the reason for the dismissals, the EAT upheld the Tribunal’s finding that the dismissals had been unfair. The Tribunal had found that, in the circumstances, the employer had not been entitled to rely on the mobility clause, its instruction to move to the other office had not been reasonable and the employees had reasonable grounds to refuse.
Employers can expect that where employees are requested to move any significant distance under a mobility clause, their mobility clause wording will be scrutinised. Often it will be a question of what the employer can offer to mitigate the disadvantage to the employee. However, this case demonstrates the significant blurring between a redundancy situation and a misconduct situation where the employee cannot be appeased. It is a generous opportunity for employers to try to show that they genuinely believed in the legal enforceability of their mobility clause provisions.