For HR professionals, the prospect of relocating an entire workforce must rank as one of the most stressful events in their entire working career. Not only is there the challenge of persuading employees to up sticks to a new location, there is the task of relocating staff as seamlessly as possible with minimal disruption to the business.
In recent years, HR managers working in the public and private sectors have been no strangers to moving staff to pastures new. The Lyons Review of 2003 proposed moving up to 20,000 public sector jobs away from London as part of the government’s relocation strategy. And the BBC unveiled plans last December to move 1,800 jobs from London to Manchester.
HR managers in both the private and public sector are faced with a common legal issue which may surface as a result of the relocations.
The majority of employees will have a mobility clause written into their employment contracts; a clause that means companies have the power to ‘legally enforce’ a move to a different place of work.
Under the Employment Rights Act 1996, employers are legally bound to issue staff with a written statement of their employment, which will stipulate a workplace in a specified location or area. But specifying a suitable distance which an employee can be expected to travel to depends on a well-worn word used in legal terminology, ‘reasonable’. There are three implied terms within a mobility clause:
– The need for an employer to give the employee reasonable notice of a move
– An obligation to ensure the compliance of the clause is not impossible
– A general duty not to destroy trust and confidence between the employee and the employer.
The Court of Appeal has held that: “Where an employee refuses to obey an instruction which is authorised by their employment contract, a reasonable employer should consider whether the employee was acting reasonably.”
Martin Malone, head of employment law at Canter Levin and Berg solicitors, says: “A mobility clause is only likely to be triggered if there are facts which dictate that a move is necessary. This will depend greatly on what is going on in a business. The clause is dealt with as a common law issue in a sense that it is connected with the terms of the interpretation of an employment contract.”
The principal obligation for HR professionals when relocating many employees is to seek the correct legal advice, says Malone. HR departments face many legal issues when attempting to move employees, not least providing ‘reasonable notice’ of the relocation and consulting all relevant parties, including staff and unions.
“Reasonable notice of a move might be dictated by the type of business. It may be necessary for some employers to move people quickly, for reasons such as competition or takeover,” says Malone. “While it might be unreasonable to expect an employee to move within four weeks, longer periods of six months might be perfectly reasonable in some contracts.”
Broadcasting its intentions
The BBC is planning to spend up to £21m to move 1,800 people from London to Manchester by the year 2011.
David Moore, lead HR partner at BBC Manchester, says: “Moving such a large number of people within a few years has led our HR team to devise a comprehensive relocation strategy. We’ve gone right back to the drawing board by consulting staff, unions and our legal team to ensure we do everything by the book. The sheer scale of moving this number of people 200 miles up the country is a major challenge.”
With six HR staff involved in the relocation, the BBC informed employees last December, providing six years’ notice of the impending move or, in the terms of a mobility clause, ‘reasonable notice’.
Although most employees have mobility clauses in their contracts, the HR team will persuade them to transfer by offering attractive relocation packages and resettlement plans.
“Employees have been consulted every step of the way to ensure the proposed relocation is reasonable. We have communicated with staff and senior management to help formulate a relocation strategy which serves everyone’s best interests,” he says. “Staff have been advised about the relocation package they are entitled to, and employees who decide not to relocate, even after being offered a range of alternatives, would ultimately be subject to redundancy terms. This could be triggered by the mobility clause – but would only be used as an absolute last resort.”
The BBC relocation team has worked with its lawyers to ensure the terms of the move are ‘reasonable’ and equal to employees across all positions.
“Inevitably, we expect senior staff will be more enthusiastic about moving than those employed in more static roles such as administration,” says Moore. “We have undertaken a preference exercise with employees to gauge the level of enthusiasm for wanting to relocate. They will be offered financial assistance to relocate.”
Moore says that most BBC employment contracts state that employees could be expected to work from any part of the UK. But while most staff are mobile, the interpretation of the clause will reflect the description of their job role within the context of business relocation, he says.
For example, a marketing executive for BBC Worldwide who sells programmes across the globe may have a job description that requires them to work from multiple locations. Conversely, the job description of a finance clerk, who is primarily expected to work from one location, would have a job description that would reflect a lesser degree of mobility.
“We are working with our legal and employee relations departments to assess and mitigate any potential legal risks,” Moore claims. “Our HR team is also benchmarking the relocation against other organisations going through the process.”
While HR hopes that most staff will move, the team is developing strategies to maximise job retention in the event that some personnel decide to stay in London.
The number of enforced mobility clauses is not increasing, according to Malone, but he says the HR sector needs to be more aware of the law as jobs in the UK and abroad are increasingly mobile. He warns that some HR departments could fall foul of the clause through “blind ignorance” of the written terms of the contract. This is often without taking into account the principles of trust and confidence between the employer and employee.
Malone says: “While departments might have sufficient expertise to relocate a few employees, moving hundreds of people requires more than just dusting off the staff handbook. Moving large numbers of people over long distances requires HR to start with a blank sheet of paper and devise a detailed action plan involving staff, legal departments, senior managers and the unions.”
Like the BBC, an NHS department in Edinburgh is facing similar staff relocation challenges, albeit on a smaller scale. NHS QIS was required to give reasonable notice to 98 staff being moved from Edinburgh to Glasgow. Staff were informed in July of their employer’s decision to relocate, with a view to moving to Glasgow by May 2007.
The first step the HR department took to give staff reasonable notice of the move was to devise a communication strategy and a project management exercise with other health boards. Further measures involved working in partnership with employees and drafting proposals for policy direction and flexible working. The team has also evaluated the terms and conditions of contracts.
Kathlyn McKellar, head of HR at NHS QIS, says: “All staff who will be moved have a mobility clause in their contracts. But the clause will remain dormant because we believe the terms of the move are reasonable. Staff have been given reasonable notice and a reasonable distance in which to move.
“We would not try to force any member of staff to relocate. They have been consulted extensively since the announcement and been presented with a wide range of options,” she says.
As with most employment contracts, Malone says employers can change the wording of a mobility clause, providing they take steps such as securing the consent of the employee. The wording might also be changed through negotiation with a union, or offering a ‘financial sweetener’ to employees. He also warns HR departments not to make the wording of mobility clauses too generic to reflect an anticipated relocation many years down the line.
“While most mobility clauses are written in contracts from the start, HR may insert or reword the clause during promotion,” Malone says. “There is little ground for dispute if a clause is inserted during a renegotiation of terms. Even if an employee works abroad, the statement of terms must indicate where and for how long they are expected to work outside the UK.”
How to avoid trouble
– Ensure mobility clauses reflect the business and the employee’s job type
– Consult extensively with staff, management, unions and lawyers as soon as notice of a relocation is given
– Devise a relocation strategy which is phased and wide-ranging leading up to the move
– Provide employees with a means to ask questions and voice concerns over the move
– Implement a staff retention strategy which examines how to maximise the number of jobs transferred to the new location
– Conduct ongoing consultation with management and trade unions to devise relocation packages and redundancy options
– Benchmark the aims and outcomes of the relocation strategy with those of other organisations.