In this article...

• The background
• The facts
• The tribunal’s decision
• The Court of Appeal’s decision
• What does it mean for me?

In the context of a potential redundancy situation, to what extent can an employer rely on a contractual mobility clause to avoid liability for redundancy payments? Julian Hoskins reports on a recent decision of the Court of Appeal.

The background

In Curling and ors v Securicor Ltd the Employment Appeal Tribunal (EAT) held that when part of a business is to be closed down, giving rise to a potential redundancy situation, an employer can adopt one of two positions.

He can either invoke a contractual mobility clause and require the employee to transfer to a different location or job, in which case no question of redundancy will arise, or rely instead on offers of suitable alternative employment as a defence to claims for a redundancy payment. What the employer cannot do is dodge between the two positions in the hope of being able to adopt the one that proves to be the more beneficial.

In the recent case of Home Office v Evans and anor the Court of Appeal clarified the implications of the Curling decision.

The facts

Mr Evans and Mr Laidlaw were immigration officers based at Waterloo International terminal. In May 2004 the Home Office announced that immigration control at Waterloo International would be closing. The employees refused to attend meetings to discuss alternative posts and in August 2004 the Home Office told them that they would be required to relocate to Heathrow airport.

The Home Office issued this instruction on the basis that the employees were subject to a mobility clause in the staff handbook, which provided: “If your status is as a mobile member of staff you are liable to be transferred to any civil service post, whether in the United Kingdom or abroad.” The employees resigned in September 2004 and claimed that they had been constructively and unfairly dismissed.

The tribunal’s decision

The employment tribunal found that both claimants were “mobile grade” employees and that the mobility clause in the staff handbook had been incorporated into their employment contracts. In the circumstances, however, the Home Office was not legally entitled to rely on the clause.

The tribunal noted that the Home Office had initially intended to treat the closure of immigration control at Waterloo International as a redundancy situation and, where possible, to offer suitable alternative employment. Having taken legal advice, it had changed its mind and deliberately invoked the mobility clause in order to avoid having to treat the closure as a redundancy situation.

In doing so, the employer had bypassed the procedures set out in a Home Office notice on redundancy, which included a requirement to consult the relevant unions, and had acted in breach of the implied contractual term of trust and confidence. Accordingly, the tribunal upheld the employees’ claims of unfair constructive dismissal.

The EAT upheld the tribunal’s decision, although on slightly different grounds, and the Home Office appealed to the Court of Appeal.

The Court of Appeal’s decision

The Court of Appeal overturned the tribunal’s decision. In its view, the tribunal had been wrong to treat Curling as authority for the proposition that an employer is not legally entitled to invoke a mobility clause when a redundancy situation might arise or has arisen on the closure of part of a business.

In Curling the employer had implemented its redundancy procedure, in which the employees had participated, and had not sought to rely on the contractual mobility clause until the tribunal hearing, as a defence to a claim for redundancy pay, by which time the tribunal considered that it was too late to raise a new point.

In this case, by contrast, there was no question of the Home Office dodging from one contractual procedure to another, having left it too late to invoke the mobility obligations, or having waived its right to invoke them. From the time of the staff announcement in May 2004, the Home Office had made it clear to the claimants that it was invoking the mobility clause and would be following that procedure, not the redundancy procedure, which it consistently did.

The claimants argued that the decision to close their workplace gave rise to a redundancy situation, with the result that the redundancy procedure was engaged prior to any attempt to invoke the mobility clause and should have been followed.

The Court rejected this argument. By the time the closure was announced, the Home Office had decided to move the claimants in accordance with the mobility clause and was not proposing to dismiss them. Accordingly, it was under no obligation to follow the redundancy procedure.

What does it mean for me?

		The Court of Appeal’s decision clarifies that an employer can exercise a contractual mobility clause in a potential redundancy situation so as to avoid liability for redundancy payments, even if it had originally envisaged following its redundancy procedure.
		However, the employer should make its intentions clear at an early stage, should act consistently thereafter, and should not simply seek to rely on the mobility clause after the event as a defence to a claim for a statutory redundancy payment.
		An employer who wishes to invoke a mobility clause – whether against the backdrop of a potential redundancy situation or not – should always ensure that he does so reasonably, in consultation with the employee, with sufficient notice and taking into account personal circumstances.