Mobile certainty

Although employers can dismiss an employee fairly for failing to abide by a clause in their contract, the Employment Appeal Tribunal (EAT) held in Kellog, Brown and Root (UK) Ltd v Fitton & Ewer that employers still have to act reasonably when instructing an employee to abide by, in this case, a contractual mobility clause.

Basic facts

In 2011, Kellogg Brown and Root took over the company where the two claimants worked. It operated out of two sites – Leatherhead and Greenford. Both men were located at the Greenford site.

Their contracts contained a mobility clause which stated the location of their employment but with the proviso that the company could require them “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 company decided in 2014 to close the Greenford site and move the entire workforce to Leatherhead. Both men objected because of the significant commute involved (20 to 30 hours extra per week). In addition, Mr Fitton had brought a property near his workplace and did not have a car; while Mr Ewer had worked near to his home town for the company (or its predecessor) for 25 years and was due to retire a year later.

A number of employees with childcare or elderly parent caring responsibilities left under the "exceptional circumstances" exception to the mobility clause and were paid a redundancy payment but the company refused to accept that the exception applied to the two men. After refusing to comply with the instruction to move locations, they were dismissed for failing to follow a reasonable management instruction. The men claimed unfair dismissal and statutory redundancy payments.

Tribunal decision

The tribunal held that the reason for both dismissals was redundancy because of the closure of the Greenford office, as opposed to the men’s conduct or for some other substantial reason as the company was arguing.

In addition, it held that the contractual clause lacked certainty as it allowed the company to decide for itself what exceptional circumstances it would accept. In particular, it did not allow for individual difficulties in complying with the clause.

The tribunal held therefore that the men were entitled to statutory redundancy payments. It also found that the dismissals were unfair, whether by reason of redundancy or, as the company had argued, for conduct or some other substantial reason. The company appealed against both decisions.

EAT decision

The EAT held that the tribunal should have approached the reason for the dismissals from the point of view of the company and not whether there was a statutory redundancy situation. Given that the tribunal itself had found that the company had a right to instruct the two men to relocate and that it was their refusal to obey that instruction that resulted in their dismissal (and therefore not a redundancy situation), the decision that they were entitled to a redundancy payment could not stand.

However, it agreed that the dismissals were unfair. The tribunal had correctly applied the three-stage test identified by the company, asking firstly whether the instruction was lawful (whether the mobility clause relied on was contractual); secondly whether the company had acted reasonably in giving that instruction; and thirdly whether the claimants had acted reasonably in refusing to comply with that instruction.  It had concluded that the mobility clause was too wide and uncertain, had been unreasonably invoked by the company and that the claimants had reasonably refused to comply with the instruction.

As the instructions were not reasonable, the tribunal was perfectly entitled to conclude that the dismissals were unfair and the EAT therefore rejected the appeal on this ground. The company is seeking to appeal to the Court of Appeal.