In Kellogg Brown & Root (UK) Ltd v (1) Fitton and (2) Ewer (UKEAT/0205/16 and UKEAT/0206/16), the Employment Appeal Tribunal upheld an employment tribunal's finding that two employees were unfairly dismissed when their employer relied on their contractual mobility clauses and instructed them to move to another site when the site at which they worked closed.
Mr Fitton and Mr Ewer were employed by Kellogg Brown & Root (UK) Ltd (Kellogg) and worked at its site in Greenford, Middlesex. Kellogg decided to close this site and instructed Mr Fitton and Mr Ewer to transfer to its site in Leatherhead, Surrey in accordance with the mobility clause in their contracts of employment.
Mr Fitton, who was 34 and had worked for Kellogg for 11 years, objected to the transfer to Leatherhead because it would increase his commute from a 20 minute Tube journey to a two hour drive each way and he did not have a car. Kellogg refused his request for a redundancy payment on the basis that he should transfer under the mobility clause. Mr Fitton refused to transfer and attempted to continue working at the Greenford site.
Mr Ewer, who was 64 and had been employed by Kellogg for 25 years, objected to the transfer to Leatherhead as he had always lived in St Albans and his commute would increase from 18 miles to 47 miles each way. Mr Ewer refused to transfer and did not attend the Leatherhead site.
Both Mr Fitton and Mr Ewer were invited to disciplinary hearings for alleged unacceptable conduct and were summarily dismissed. Their appeals were unsuccessful and they both issued proceedings for unfair dismissal and a statutory redundancy payment.
Employment tribunal decision
The employment tribunal (ET) held that the employees' place of work had been Greenford and it was not a reasonable instruction to require them to transfer to Leatherhead due to the increased travelling time. It was relevant that Mr Ewer was close to retirement and had lived in St Albans for many years and it was reasonable for him to refuse to undertake the increased commute.
The employment judge found that the reason for the dismissal was redundancy. However, the dismissals were unfair due to the failure to follow a fair dismissal procedure. Kellogg appealed to the Employment Appeal Tribunal (EAT).
Employment Appeal Tribunal decision
The EAT allowed the appeal in respect of the reason for dismissal, finding that the reason was misconduct, not redundancy. However, the EAT agreed with the ET that the dismissals were unfair.
The EAT found that the employment judge went wrong by identifying the redundancy situation and then finding that this was the reason for the dismissal. The correct approach was to consider why Kellogg decided to dismiss Mr Fitton and Mr Ewer, which was because Kellogg believed that it was a reasonable instruction to require the two employees to move to Leatherhead. Kellogg dismissed them because they refused to comply with the instruction.
The EAT rejected Kellogg's argument that the judge's finding that the dismissals were unfair could not stand because they had been approached as redundancy dismissals. However, the EAT believed that the judge had made sufficient findings in respect of the conduct dismissal to support a conclusion of unfair dismissal. Specifically, the judge had concluded that it was not a valid contractual requirement for Mr Ewer to move to Leatherhead and that Kellogg's instruction was therefore not reasonable. Similar findings were made in Mr Fitton's case.
While Mr Ewer and Mr Fitton may not have received a statutory redundancy payment, as the reason for their dismissals was not redundancy, they should still have received an equivalent amount by way of a basic award in addition to a compensatory award, as their dismissals were found to be unfair.
This decision confirms that employers should exercise caution when attempting to rely on a mobility clause to move employees some distance. In this case, Greenford and Leatherhead were far apart in terms of a commute for the employees. While Kellogg took steps to alleviate the longer commute, for example, allowing an earlier finish for those who were affected by M25 traffic and offering compensation for six months, this did not change the position that it was reasonable for the employees to refuse to move their place of work.
Kellogg had a very widely drafted mobility clause in their contracts, which the EAT believed lacked certainty, and it is important that employers review their mobility clauses to ensure that they are no wider than is necessary. When an employer seeks to rely on a mobility clause, an ET will scrutinise the terms of the clause and the manner in which the employer seeks to rely on it. This case confirms that the use of a mobility clause may avoid a redundancy dismissal but it is important that employers seek advice as to whether they will be able to rely on the clause and limit the risk of any claim.