Following the vote to leave the European Union, many predicated that the UK would plunge into an immediate economic crisis. One of the fears was a significate raise in unemployment. Whilst we must try and focus on the positives – the UK economy is estimated to have grown by 1.8% in 2016 – it’s hard to remain optimistic in view of the number of companies announcing they are relocating jobs to Europe and other parts of the world. Nestlé recently announced that it would be moving 300 jobs to Poland, JP Morgan is preparing to move hundreds of jobs from London, Deutsche Bank also announced plans to move 4000 jobs.
Despite assurances by Teresa May, many are, understandably, left feeling vulnerable. So, where does this leave those employees who are told their jobs are moving abroad?
While some might see it as a wonderful opportunity to up sticks and try something new, others may not be so thrilled. If this happens to you, here’s what you need to know about your legal position:
Do you have to relocate?
Many employment contracts contain a mobility clause. Such clauses allow employers to relocate staff. An employer may be entitled to dismiss anyone who refuses to move.
The first step is to look at how the clause is worded. Does it place geographic limits on where staff can be relocated, does it stipulate how much notice the employee should be given or set out the circumstances in which the clause can be exercised?
If the employer fails to comply with contractual obligations when exercising the right, the employee should raise a grievance, and may be able to resign and bring a claim for constructive dismissal.
There are constraints on the way an employer can exercise the right to relocate – even where the mobility clause, on the face of it, appears to allow the employer complete freedom.
There is an implied term that the employer will give reasonable notice of any move; the employer should consult with employees prior to any move and where the employer is intending to relocate employees a long way, it would be expected to have a good reason for the move and to be able to show that it had considered other options before imposing any change.
Where there is no mobility clause (express or implied) and the employer attempts to force the employee to relocate, the employee may have a claim for breach of contract, constructive dismissal or redundancy pay.
What can an employee can do to challenge a relocation?
If the entire workforce is relocating, this will amount to a redundancy situation, and as long as a fair redundancy procedure is followed, the employer is unlikely to have a legal basis to challenge the move.
However, where some employees are selected for relocation, employees affected should consider the following: has the employer breached any contractual obligation in the way in which it has exercised the right to relocate; will relocation mean moving house or in some other way significantly inconvenience the employee; has the employee been unfairly selected for relocation; is the selection discriminatory; are there other options, apart from relocation; what consideration has the employer given to alternatives to relocation.
Is the employee entitled to compensation if they lose their job as a result of not moving?
In cases where the detrimental effect of the change is significant, the employee would be entitled to resign without notice, claim constructive dismissal and claim loss of earnings.
In redundancy situations, employers often try and argue that the role at the new location is a suitable alternative role, and therefore claim that there is no redundancy, as such, no entitlement to redundancy pay. In order to claim redundancy pay, it’s important that the employee identifies why their role is not suitable (how the additional travel/relocation will significantly inconvenience their family).
Where the employee is dismissed and has at least two years’ service, they will be entitled to a statutory redundancy pay and may also be entitled to an enhanced, contractual, redundancy payment.