Sometimes businesses need to relocate. Especially if the company is growing or your current workplace doesn't allow your employees to thrive. But you must ensure you organise it effectively.
This means being aware of your employees' relocation rights. Otherwise, you could be at risk of breaching an employee's contract. This could open you up to employment tribunal claims, legal costs, and even reputational damage.
In this guide, we'll discuss what you should consider before relocating, employees' rights, and how to manage a relocation.
Why might a business relocate?
There are several reasons why you may choose to move.
These include:
- Company growth.
- Improved work facilities.
- To cut costs.
If you're planning to relocate, there are several things you need to think about. Such as working out what the best option is for your employees.
What should a business consider before relocating?
Relocating your business could have many benefits, but it may have negative effects on your employees. Which is why you need to think about whether it's the right decision.
Before you move, you should consider:
- If your new office will have the same access to public transport.
- How far your new location is from your current workplace. For example, will this new location be difficult for employees to travel to.
- If the relocation will have a negative impact on affected employees. For instance, if it results in a decline of an employee's quality of life.
If you decide to relocate, then you must be aware of your employee's contractual rights.
What are employee relocation rights?
It's important to know what you can legally request from your employees during a relocation. And the answer will be in an employee's contract, under the mobility clause.
The mobility clause
If you include a mobility clause in your employment contracts, you could rely on this when requesting staff to relocate. Especially if the clause states that relocation - due to business needs - is a condition of employment.
However, the clause must be reasonable. For example, you couldn’t force someone to move from Iverness to London.
Unless you are able to come to a mutual agreement with your employee – which isn’t always possible - they may resign. Or they could even claim constructive dismissal.
The mobility clause may also set certain limits. For instance, any relocation will be within a certain radius of the current workplace. Employers can therefore request staff to relocate but workers must consider the relocation reasonable.
What is a reasonable office relocation?
Whether your employees think your relocation is reasonable depends on the situation. But, a reasonable relocation typically considers the following matters:
- Whether the relocation is time-consuming. For example, if a relocation doubles an employee's commute time.
- The distance employees will travel, or if it's a difficult journey. For instance, if a relocation means an employee has to travel for a considerably longer distance and there are little public transport links.
- The impact on staff members or employee wellbeing. For example, it would be unreasonable to ask an employee to move to another country with just one day's notice.
If an employee believes that the relocation is unreasonable, they may refuse to relocate.
What happens if an employee refuses to relocate?
Not all staff members will be happy when an employer moves. And there are several reasons they may decide not to relocate.
These include:
- The relocation affects personal matters.
- Relocating would impact their children's education.
- The commute to work would be difficult.
If an employee refuses to relocate, you could go through the
Relocation redundancy pay
You may choose to offer an employee a redundancy payment if they refuse to relocate. But, an employee must also meet certain criteria in order to qualify for redundancy pay.
These are:
- The employee has had a length of service of two years or more.
- The worker is not getting any compensation from their employer because they have chosen not to move. For example, they aren’t receiving financial support for relocating.
- They haven’t ‘unreasonably’ refused an offer of suitable alternative work. For example, they've decided not to move even though the office's new position is a short distance from the old one.
Can you dismiss an employee for refusing to relocate?
If an employee is refusing to relocate, but there is a reasonable mobility clause – for example, the relocation is within a reasonable distance to the old location - you could consider it misconduct. Because they are breaching their employment contract it may be grounds for dismissal.
However, when considering dismissal, you should proceed with caution. As what an individual deems as reasonable may differ from person to person. And if a tribunal decides the relocation was unreasonable, the employee could claim unfair dismissal.
If the business has new owner
Sometimes, a company may relocate because it's under new ownership. And the Transfer of Undertakings (Protection of Employment) regulations 2006 (TUPE) may protect employee rights if it applies to the circumstances.
TUPE would only apply if:
- The employer legally classes the staff member as an employee.
- The part of the organisation that’s transferring is in the UK.
If TUPE applies, employees have the right to claim:
- Unfair dismissal.
- Redundancy protection.
- Holiday entitlement.
- Unpaid wages.
If TUPE doesn’t apply, employees can still refuse to work for the new employer. But they cannot claim unfair dismissal.
How to manage your business relocation
Once you've thoroughly considered every aspect of your company's relocation, you can plan how to manage it effectively.
This includes:
Giving notice
When considering a relocation, you should consult your employees first to get their opinions. And see whether relocating is in everyone’s best interest. This includes having private conversations with employees, to give them the freedom to chat in a confidential setting.
If you decide it is, you should give employees a considerable amount of notice if you want to relocate. Otherwise, they may deem the move unreasonable. How reasonable the notice is depends on how much impact the relocation will have.
For example, if you're planning to move your company to another country, you would need to give employees plenty of notice. But, if you’re only moving down the road, they would require less notice.
Relocation assistance scheme
You should also consider offering a relocation assistance scheme to your employees. This could involve providing a relocation package, which may include financial support. As well as help with finding a place to live.
This type of compensation is not a legal requirement. But could help to build a better relationship with your employees during the relocation.
Keep an open channel of communication
It's important for you and employees to be transparent during a company move. For example, you may encourage staff to share their thoughts on an employee engagement survey.
Or, you may wish to have regular catch ups with employees. So they can process their feelings and you can talk through any issues together.
Get expert advice from Peninsula UK
Relocation may be unavoidable for some companies. And it's up to you as an employer to ensure it runs smoothly. As well as making sure your employees aren't adversely affected.
This means taking the right considerations and following contractual rights. Otherwise, you could face employment tribunal claims, legal costs, and even reputational damage.
Peninsula offers you expert 24/7 HR advice and support, helping you manage your workplace's relocation, as well as offering employment contract advice, such as what to include in your mobility clause. Contact us on 0800 051 3688.
