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Employer wins appeal over redundancy payments

An employer has won an appeal against having to make redundancy payments to employees who were unwilling to relocate to a new workplace.

The employer had operated from two offices that were about 90 minutes' travelling time apart. The employees' contracts of employment contained a mobility clause obliging them to work at a different location if required unless exceptional circumstances prevailed.

When the employer announced its intention to close one office and transfer its work to the other, the employees objected on the basis that the additional travel was unacceptable.

Neither of them attended work at the new office after the move and, following disciplinary hearings, the employer dismissed them for serious misconduct.

The Employment Tribunal ruled that the dismissals were unfair and that the employees were entitled to redundancy pay.

The Employment Appeal Tribunal (EAT) upheld the unfair dismissal claims on the basis that the mere existence of a mobility clause did not mean that it was lawful and reasonable for an employer to invoke it. The tribunal had considered whether the instruction to relocate had been legitimate, in the sense that it was a valid contractual requirement. It had concluded that, in the employees' circumstances, it was not.

However, the EAT upheld the employer's appeal against statutory redundancy payments. The employer had believed that it was reasonable to require the employees to attend the new office. Although there might have been a redundancy situation, the employer had dismissed the employees for failing to comply with what it considered to be a reasonable requirement. That meant that no statutory redundancy payment was due.

Please contact us if you would like more information about the issues raised in this article or any aspect of employment law.

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