Employers can invoke mobility clause to avoid redundancies

The Court of Appeal has held that an employer was entitled to rely on a mobility clause in employees’ contracts of employment in order to relocate them, rather than making them redundant upon the closure of their place of work.

Home Office v Evans concerned immigration officers based at Waterloo International Terminal. In 2004, the Home Office decided that immigration control was no longer required at Waterloo and initially considered making employees redundant. However, the Home Office then changed its mind and decided to enforce the mobility provisions set out in the staff handbook in order to move the immigration officers to work elsewhere. According to the staff handbook, immigration officers could "be required to transfer to anywhere in the United Kingdom or abroad".

The Home Office sought to meet with each immigration officer individually to discuss alternative employment and made it clear that staff might be compulsorily transferred in order to meet business needs. Two immigration officers refused to take part in this process. They were informed by the Home Office that they would be transferred to Heathrow, as a result of which they resigned and brought claims for constructive dismissal.

The Employment Tribunal concluded that the Home Office had a choice between invoking the mobility provisions and making redundancies. However, that choice had to be made at the time the obligation to consult arose and once made, the employer could not change its mind. The tribunal also found that the Home Office had acted in fundamental breach of the implied term of mutual trust and confidence in deliberately invoking the mobility provisions to avoid having to formally consult under its redundancy procedure. The tribunal therefore found that the two immigration officers had been constructively dismissed.

This decision has now been overturned by the Court of Appeal. The Court found that at all times after its staff announcement the Home Office clearly and consistently followed the contractual mobility procedure and not the redundancy process. The Court concluded that the key issue was not the motive of the Home Office for changing its mind but whether it was legally entitled to invoke the mobility clause. In the Court’s view, the Home Office was so entitled.

The Court of Appeal found that while a redundancy situation such as the one caused by the closure of Waterloo International Terminal created the possibility of dismissals, it did not automatically mean that the employer was dismissing or proposing to dismiss employees by reason of redundancy. At the time the closure of the terminal was announced, the Home Office had decided to exercise its contractual right to move the employees in accordance with their mobility obligations. In these circumstances, the Home Office had not acted in breach of contract and the immigration officers had not been constructively dismissed.

This case should provide reassurance to employers that their initial view on a matter such as this will not be binding. However, it does appear from the judgment that the staff announcement is the final point at which the employer can change its mind.

Employers wishing to rely on a mobility clause should bear in mind that such clauses are interpreted strictly by the courts. Therefore, employers must ensure that they do not act in a manner which extends the ambit of the clause, as doing so will give rise to the risk of employees succeeding in constructive dismissal claims. Employers should also ensure that mobility clauses included within employees’ contracts are well-drafted and unambiguous.

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Court of Appeal rules on employment status of agency workers
Advocate General gives opinion in two important cases
Reliance on expired disciplinary warnings
Q&A - Agency workers