Relocation: pitfalls and best practice for employers

There are a number of reasons why companies decide to move – consolidation, cost savings, space – but whatever the rationale, it is likely to have a big impact on staff, particularly if they are being asked to move house or commute further.






10 things to get right: expert tips



  1. Give people reasonable notice, state what the business case is for moving someone, and consider offering them financial assistance.
  2. If you want to move somebody or you want to have the right to move somebody, it would be advisable for an employer to make that an express term in their contract.
  3. If moving employees outside the UK to a country they have never been to, support before arrival helps.
  4. Consider the rest of an employee’s family. If the family is unhappy, the employee is unhappy, and ultimately their work will not be up to scratch.
  5. Put some structure to the guidance materials that you provide – make sure it is clear and concise, for both managers and staff.
  6. Support surgeries can be invaluable. People will need extra support.
  7. Look at where staff live, particularly key staff. And consider whether people need to be in the office every day.
  8. Don’t overlook severance obligations at the early stage – they can often prevent a relocation from being cost effective.
  9. Consider how you are going to recruit staff in the new location. Don’t just read the headline statistics of what the labour cost is. Dig into the detail with local recruitment consultants.
  10. Meet people individually, to discuss the relocation, as early as possible.


 

Julie Davies, HR manager for strategy and policy at Cheshire East Council, says distance was one of the biggest issues for staff when the unitary authority was established last year. The amalgamation of various legacy authorities in the county led to relocating about 1,000 employees, many of whom were transferred from Chester to Crewe, 25 miles away. The authority hired a consultant to devise travel plans for staff, started shuttle bus services, and introduced a reimbursement programme for employees whose travel costs increased. Even so, not all were prepared to move.

“We had some people refusing to move,” says Davies. “Some couldn’t move for personal reasons. They couldn’t add an extra hour or so travelling each way into their lives and there was no easy solution to that.

“Amazingly, we only had six formal grievances about the move itself. We attribute that to the amount of support we offered,” she adds.

Flexible working

One of the council’s solutions involved re-organising the office space and working hours. “To mitigate some of the travel, we’ve stepped up our mobile and flexible working initiatives,” says Davies.

Stephen Fleetwood, head of global location advisory at property consultancy DTZ, says this is an increasingly common strategy. “Homeworking is something that five years ago was rare, partly because of the lack of technology, and partly because organisations were reluctant. But now it is becoming much more of an option, particularly where companies have hot-desking and people work one or two days at home.”

Support

Giving employees plenty of notice and preparing them for a move is another important step. Sage, the academic and professional publisher, recently announced plans to move its warehouse from London to Peterborough. Carol Irwin, HR director, says nine of the 15 warehouse staff have agreed to relocate.







Negotiating the legal minefield



  • The dismissal of employees because they do not wish to move to new business premises will still normally constitute a redundancy dismissal.
  • A valid and applicable mobility clause can be invoked at the outset to implement a business relocation rather than following a redundancy programme and, in this case, it will avoid the need for a redundancy dismissal – any subsequent dismissal for refusal to relocate would usually be for misconduct.
  • Take into account that, although mobility clauses may be useful for other reasons in relation to a business relocation, they cannot be relied on to broaden an employee’s place of work, and hence to avoid liability to make redundancy payments where a redundancy programme has been instituted.
  • If an employee refuses to move to the new business premises, in determining whether a redundancy payment is payable, consider whether he or she has unreasonably refused an offer of suitable alternative employment.
  • Start consultation with the affected employees as soon as possible and bear in mind that collective as well as individual consultation may be required.
  • Be aware of the possibility of an indirect sex discrimination claim from a woman who refuses to move to the new premises.

Further information on dealing with relocation of business premises.



 

“Following the announcement and first consultation meeting, we organised a trip to Peterborough for the staff to see the new warehouse and to look round the city,” says Irwin. “We also invited partners and families to come on the trip. We prepared packs for everyone who came, with information on the local area, including accommodation and schools.”

Getting families on board is a crucial step, but one that is often overlooked. A study published by the Joseph Rowntree Foundation in 2003 found that many employers were failing to acknowledge the impact moving may have on an employee’s family, and that partners and children were often negatively affected.

A desire not to uproot families is one reason employers are increasingly shortening overseas or long-distance placements, says Neil Bishop, business development director at corporate relocation firm Bishop’s Move.

“There are definitely more companies shortening assignments, whether that is somebody being asked to relocate to New York, Paris or Edinburgh. In the past it was usually a two- or three-year secondment. Employers are now wondering if it is really required. Maybe they’ll move them there for six months; perhaps they can commute and they won’t relocate the family.”

Expenses

Bishop says the recession is another factor behind these shortened postings, as commuting costs are often cheaper than paying to relocate entire families twice over a two- or three-year period. He says firms are also cutting back on other relocation allowances.

But Lynne Marr, partner in the employment law team at law firm Brodies, says helping out with expenses is often vital if companies want to keep employees.

“Companies might want to give some consideration to paying towards relocation costs for employees, because if they don’t – if they don’t help them move house, for example – it might be impossible for them,” she says.

Marr believes incentives can help dissuade employees from becoming disgruntled and taking action against employers, but warns it is not a fail-safe plan. “If you made a financial payment to them, it wouldn’t necessarily stop them from making a claim, and it wouldn’t necessarily stop them from being successful.”

Recession

The recession is also likely to have had an impact on employees’ willingness to move. While unemployment has risen to its highest level since 1994, the housing market is also stagnating, and many people are reluctant to sell property in this environment.







Useful resources on XpertHR

Contract clause allowing employers to reclaim relocation expenses paid to an employee

Agreement for an employee to repay relocation assistance if he or she leaves employment within a certain period

Letter informing an employee of the possibility that the employer is going to relocate its premises

Letter informing an employee that the employer is to relocate its premises

Policy on relocation assistance.



 

“Staff generally aren’t prepared to travel or move if the labour market in their area is such that they could seek alternative employment,” says Fleetwood. “It is certainly not the case that it is all doom and gloom out there. I don’t think it is as much of an employers’ market as the press would have us believe.”

Moving people away from the South East remains particularly problematic, adds Bishop. “There has always been the problem of the price differentiation of the value of a property in the South and the value in the North. While an individual might get a bigger property with the relocation, there is going to be some stage where that individual might want to move back to where their roots are. The likelihood is the value of the property is not going to increase as much in the North, and they are going to have to struggle to relocate back to the South. Some employees will not relocate because financially, it is damaging long term.”

 

 

 

 

 

 

 

 

 

 

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