Employee Relocation Rights: Mobility Clauses, Contract Changes and Reasonable Relocation

Understanding employee relocation rights is essential for employers managing domestic or international moves. When a business requires a change of work location, employers must ensure the request is legal, fair, and clearly supported by the employee contract.  The expansion of a company into new areas is key when it comes to accessing the best markets and talent for your business, but while the advantages of employee relocation are clear, not all strategies will be welcomed by everyone involved. Supporting your employees with relocation management services should be the priority for your programme.

It’s important to remember that relocation can place significant pressure on employees, affecting their work, wellbeing and personal lives. Employers who overlook the legal aspects risk disputes, higher costs and the loss of key talent. To organise a successful corporate relocation programme, employers must know the rights of their employees inside and out.

Understanding Employee Relocation Rights

Employee relocation rights refer to the legal and contractual protections employees have when an employer asks them to move to a new location. These rights ensure that any relocation request is fair, reasonable, and clearly defined within the employment contract. 

Most relocation-related rights centre around the presence, or absence, of a mobility clause. A mobility clause outlines the circumstances in which an employer can request an employee to change their work location. If this clause exists, employees are generally expected to follow the relocation request, unless the move is deemed unreasonable.

Reasonable vs Unreasonable Relocation

What counts as a ‘reasonable relocation’ can vary widely. There is no strict legal definition, and what may be reasonable for one employee could be unreasonable for another, depending on family responsibilities, 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 cost of living
• 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 employee’s overall quality of life. 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:

• 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 offering a relocation package.
• Commute: If relocation will increase the employee’s commute a considerable amount, this could be a cause for refusal.
• Salary: Inconvenience to the employee may be a cause for a salary increase.

Amount of notice: Provide employees with ample and written notice of their relocation, with all the information they need.

What is a Mobility Clause?

A mobility clause is a provision in an employment contract that allows an employer to change an employee’s work location when necessary. A position that may require relocation typically requires employees to sign a contract containing this clause. 

Purpose of a Mobility Clause

The mobility clause exists to give employers flexibility. It allows them to:

• Respond to business and economic changes.
• Open or consolidate offices.
• Support internal expansion
• Deploy employees to locations where their skills are needed.

When a Mobility Clause applies

A mobility clause only applies when:

• The requirement to relocate is clearly written into the employment contract.
• The change applies to the type of work the employee performs.
• The relocation request is reasonable in timing and impact.
• Adequate notice and information are provided.

What if there isn’t a Mobility Clause in Place?  

When an employment contract does not contain a mobility clause, an employer cannot require an employee to relocate. However, employers retain the ability to negotiate a relocation with the employee. In this situation, both parties can mutually agree on new terms such as updated working arrangements and incentives.

If both parties cannot agree, the employer may consider redundancy. To ensure the redundancy process is fair, employers must first explore suitable alternative roles at the same location or within the new proposed location. If a suitable role is offered and the employee unreasonably refuses it, they may forfeit their entitlement to redundancy pay.

If an employer attempts to force a relocation without a contractual mobility clause, this may be seen as a fundamental breach of the employment contract. In this situation, the employee has the right to resign and claim constructive dismissal. Employers should therefore approach relocation without a mobility clause cautiously, prioritising consultation, transparency and fair negotiation.

Changing an Employee’s Contract When Relocation is Required

As mentioned above, when an employer wishes to change an employee’s work location, the employment contract must allow for relocation, unless a mutual agreement is made between the employer and the employee. 

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. However, it is best practice that any changes to contracts be mutually agreed upon.

There are, however, instances where employers may try to ‘force’ changes, such as:

• Imposing new terms on an existing contract, such as a new work location, without the consent of the employee.
• Providing written notice under a “variation clause” to introduce relocation requirements, which can be lawful if the change is deemed ‘reasonable’.
• Threatening dismissal if the employee does not agree to the proposed relocation terms.
• Terminating the existing contract and offering a new one with revised relocation provisions, effectively implementing a ‘fire and rehire’. 

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 with 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.

What Employees Should Do When Contract Changes Involve Relocation

Employees should always have a thorough read of their contracts before signing them, especially if the role includes a mobility clause or any requirement to relocate. Even if there are no immediate 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 may be taken as acceptance of any changes. 

There is room for negotiation, particularly if a proposed relocation affects personal circumstances, costs, commuting time, or family life. Employees should raise any concerns as early as possible so that any contract changes related to relocation can be mutually agreed upon.

If employees are dissatisfied with proposed relocation-related changes or the result of negotiations, they can notify their employer in writing that they do not agree. Concerns and potential claims should also be outlined. 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 Citizens Advice if you’re unsure of any changes, including relocation clauses, in your employment contract.