Global expansion of a company is key when it comes to accessing the best markets and talent for your business. While the advantages of employee relocation are clear, not all strategies will be welcomed by all involved parties. Supporting your employees with relocation management services should be the priority for your programme.
Relocation can be a huge challenge for employees, putting pressure on their lives, work, and personal relationships. The last thing a business needs is to be made vulnerable to legal claims or the loss of vital employees. Managing legal aspects will also ensure that productivity is boosted through employee relocation and that costs are kept to a minimum. To organise a successful corporate relocation programme, employers must know the rights of their employees inside and out.
What Changes Can Employers Make to An Employee’s Contract?
Employers can make changes to contracts that have been previously agreed upon by the employee concerned, or a collective agreement with an association such as a trade union, or an implication, i.e., a change in long-standing practice. While it is best practice that any changes to contracts be mutually agreed upon, there are instances where employers may try to ‘force’ changes:
- Imposing new terms to an existing contract without the consent of the employee.
- Providing written notice of the changes under a “variation clause”.
- Threatening dismissal of employees who don’t agree to proposed changes.
- Terminating the existing contract and offering a new employment contract with changed terms and conditions, effectively implementing a ‘fire and rehire’.
What Changes Can Employers Make to An Employee’s Contract?
Employers can make changes to contracts that have been previously agreed upon by the employee concerned, or a collective agreement with an association such as a trade union, or an implication, i.e., a change in long-standing practice. While it is best practice that any changes to contracts be mutually agreed upon, there are instances where employers may try to ‘force’ changes:
- Imposing new terms to an existing contract without the consent of the employee.
- Providing written notice of the changes under a “variation clause”.
- Threatening dismissal of employees who don’t agree to proposed changes.
- Terminating the existing contract and offering a new employment contract with changed terms and conditions, effectively implementing a ‘fire and rehire’.
Employee Action List for Employment Contract Changes
Employees must always have a thorough read of their contracts before signing them, even if they agree with the outlined clauses. Even if there are no proposed changes to working patterns, employers are required by law to outline the main conditions of employment in a written statement. Continuing with work as usual will be considered as having agreed to any changes by the employee. There is room for negotiation and it must be invoked so the changes are mutually beneficial.
Should employees be dissatisfied with proposed changes or the outcome of a potential negotiation, they can let their employer know in writing that they refuse it, and add any potential claims to the document. They can also continue working under the old terms and simply refuse the changes proposed. Employees who are members of a union can get them to protest on their behalf.
Check out the helpful resources on Citizen’s Advice if you’re unsure of any changes in your employment contract.
What are Employees’ Relocation Rights?
A position that may require relocation requires joining employees to sign a contract that includes the details of this requirement; this is called a mobility clause.
If a ‘mobility clause’ is present in an employee contract, relocation must be followed through unless the relocation is deemed unreasonable by employees. This means that there are, in fact, instances where the relocation of an employee can be classed as unreasonable.
What Classes a Relocation as ‘Reasonable’ or ‘Unreasonable’?
What is meant by an unreasonable move is not defined by rigid figures, which means there is no firm answer to questions such as ‘What is a reasonable distance for relocation?’. What is seen as reasonable for some employees may be taken as unreasonable by others, as different employees will have varying dependent family members, living situations, and personal responsibilities. An example of an unreasonable employee relocation could be:
- Asked to move to a city or area with a higher living cost
- Requested to move abroad within a short amount of time
- Relocating to the other side of the UK despite having children in school
You must consider the effect of an employee relocation on the quality of life of the allocated employee. If the move would cause a decline in their quality and enjoyment of life, the relocation is likely to be classed as unreasonable.
To ensure that the relocation you are asking of your employee is reasonable, the following factors should be considered as they can influence the legitimacy of a relocation:
- Distance to a new location: If the distance to their new location is deemed too far, this could be considered unreasonable.
- Costs: For expensive moves, employers should consider taking on some of the relocation costs or offer a relocation package.
- Commute: If relocation will increase the employee’s commute a considerable amount, this could be cause for refusal.
- Salary: Inconvenience to the employee may be a cause for a salary increase.
- Amount of notice: Give employees ample and written notice of their relocation, with all the information they need.
What if there isn’t a Mobility Clause in Place?
Even if there is no mobility clause in place, employers retain the ability to negotiate a relocation with the employee. In this situation, both parties can mutually agree on modifying the employee’s contract or redundancy.
If the conclusion ends in redundancy, to ensure it is fair, employers must explore alternative positions at the same location or within the new location. The employee may still unreasonably reject this offer, which would leave them to forfeit their entitlement to redundancy pay.
In the case of an employer insisting on relocating an employee against their wishes, even without a contractual mobility clause, this action could be considered a fundamental breach of the employment contract. If this happens, the employee has the right to resign and claim constructive dismissal.
Statutory Code of Practice on Dismissal and Re-engagement (Fire and Rehire)
On July 18th, 2024, the Statutory Code of Practice on Dismissal and Re-engagement came into effect providing employers and employees practical guidance for cases commonly known as ‘fire and rehire’. Failure to comply with the Code of Practice does not create grounds for a separate claim, but tribunals must consider it in relevant cases like unfair dismissal (see below). If an employer unreasonably fails to adhere to it, tribunals can increase compensation by up to 25%.
You can read more about the Code of Practice on the UK Government’s website.
Is it Possible to Force Relocation under the Employment Law?
As an employer, you cannot force an unreasonable relocation on staff members. If the relocation assignment is considered unreasonable by the employee, they can then decide to refuse to move per the company’s wishes. Without a mobility clause in the contract of employment, staff have the option to choose whether they wish to carry out the relocation or not.
A relocation allowance can help mitigate any potential conflict of interest that might arise during employment contract changes due to relocation.
Employers should only consider dismissing an employee if they are refusing a relocation that the employers consider to be reasonable. However, bear in mind that ‘reasonable’ is a subjective term.
If your HR department or global mobility team needs extra assistance providing Employee Relocation Services, Gerson Relocation can help. Get a quote with us today.
Related Posts
