Successful relocation of employees: legal considerations

Relocating employees around the world for global companies theoretically benefits both parties, with career enhancement for the employees and more effective deployment of quality resource for the companies. Sometimes, however, the process is not such plain sailing.

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When both parties are mutually committed, relocation presents an exciting and positive challenge. Many companies have invested heavily in engaging employee relocation services to help smooth the path.

Interpretation of ‘mobility’ terms

When relocation is undesirable to the employee, this can lead to significant legal problems. Whilst the devil is in the detail, the first port of call is the employment contract, where the location is usually specified or – in the case of floating locations – there is some indication in writing. Such terms cannot be written so widely that employers can relocate employees at will.

Naturally, most employers retain flexibility through a ‘mobility’ clause; however, this is likely to be considered in the context of what is reasonable in the circumstances. A common practice for employment tribunals is to take the interpretation of mobility clauses at their exact meaning alongside other terms of the contract. In the case of United Bank Limited v Akhtar 1989, where insufficient notice was given, no relocation expenses were provided and the trust in the relationship was undermined.

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Even when relocation is at the employer’s discretion, the onus is on the employer to consider whether their business reasons justify the transfer of an employee and their personal circumstances, notwithstanding any employee relocation services provided. These are usually contracted out to specialists with a fine eye for detail and experience in the target areas, such as dt moving.

Refusal to relocate

Where employees refuse to move and there is ambiguity over the terms of the contract, employers can consider dismissing and re-engaging the employee; however, this may cause unfair dismissal issues, which is exacerbated if dealing with more than 20 employees.

By the same token, employees may not simply refuse to relocate – a tribunal would also consider whether such a decision was reasonable.

Reasonableness is the watchword in mitigating legal implications. Good communication supported by realistic compensation and/or flexibility will go a long way towards achieving mutually satisfactory relocations, but both sides of the equation need to be aware of the legal pitfalls.

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