Helping a food and drink client to relocate employees

During 2024 we have been assisting a food manufacturing client with the relocation of its head office. The lease is due to expire and the client wanted to relocate to more modern and sustainable offices. The client wanted to understand the legal position in relation to relocation of employees and to glean from our experience how the issue of relocation should best be handled from an employee relations point of view.

We discussed giving employees as much notice of the proposed move as possible, to be weighed up against the business objective to reduce the period of uncertainty and to only introduce the issue of relocation to employees once it was sure it was going to go ahead and make the move.

We helped the client to understand that the change in location would still be a change to contractual terms. We advised that the client should approach this on the basis of a consultation with affected employees, by which the client would explain the relocation, its benefits for the organisation, its impact on the employees and then answer any concerns on the part of employees.

The client wanted to understand what the fall back position was should some staff resist the relocation.  As with most employment contracts, there was a mobility clause that allowed the employer to change the place of work. If there was resistance from any employees then the client could point to this clause, but we advised that the client must still exercise that clause consistent with the implied obligation to maintain a relationship of trust and confidence with each employee.

If the client gives employees fair notice of the relocation and carries out a consultation and Q&A process, as suggested above, then that will go a long way to showing that a client had acted reasonably.  But what is reasonable for one employee may differ from another, depending on personal circumstances, such as the employee’s new commute and any other personal circumstances that may be affected, such a caring responsibilities.

There is no legal requirement for an employer to offer any incentive for the employee to agree to the change to their place of work. But offering such an incentive can help to smooth the path to agreement and we commonly see agreements to reimburse some additional travel costs or pay some form of relocation or disturbance allowance.

We strongly advised the client to ensure that any such arrangements were limited in time.  This is not just because of the ongoing costs of providing such incentives indefinitely, but also to reflect that after a certain period of time, the employees will need to accept that their place of work has permanently changed.  Also, in long term the client did not want to have a two tier workforce, where a long serving employee is receiving a travel allowance whilst a newer recruit doing the same job is not.

We advised the client that ultimately if any employees did not agree to the change, then there could be grounds for fairly dismissing them by reason of redundancy or some other substantial reason. Fortunately this was not necessary and the employer was able to obtain the agreement of all employees to the relocation.