Labour & European Law Review Weekly issue 57 13 March 2008
Home Office v Evans and Laidlaw (IDS 845; IRLR (2008, 59)
The law specifies the circumstances in which employers can make employees redundant. But what happens if the employer also has the option of invoking a mobility clause? In Home Office v Evans and Laidlaw (IDS 845; IRLR (2008, 59), the Court of Appeal said that employers can enforce a mobility clause to avoid making staff redundant.
Mr Evans and Mr Laidlaw both worked as immigration officers for the Home Office, based at Waterloo International Terminal. Their staff handbook, which contained details of their terms and conditions, stated that they could be transferred anywhere.
In early April 2004, the Home Office decided to close Waterloo and initially considered invoking its redundancy procedures. Following legal advice, it changed its mind and decided to enforce the mobility clauses set out in the handbook. It held a number of meetings with staff, which both men refused to attend.
In August, the Home Office told the two men that they would be transferred to Heathrow. Both of them resigned in September and lodged tribunal claims for breach of contract and unfair dismissal.
Tribunal and EAT decisions
Relying on the case of Curling and ors v Securicor Ltd, the tribunal said that the Home Office was not entitled to change its mind and enforce the mobility clauses once it had considered the possibility of making the men redundant. The employer cannot, in other words, “dodge between the two”. Instead it said that, having considered redundancy, the department was obliged to issue redundancy notices.
The Home Office had therefore acted in fundamental breach of contract by deliberately invoking the mobility obligations As the reason for their dismissal was the failure of the Home Office to issue redundancy notices, their dismissal was unfair. And the Employment Appeal Tribunal (EAT) agreed with this analysis.
Court of Appeal
But the Court of Appeal disagreed. It said that both the tribunal and the EAT had misapplied Curling which concerned an employer who had changed their mind very late in the day (actually at the tribunal hearing) about whether to invoke the redundancy procedure or the mobility clause.
The facts in this case were completely different said the court as the Home Office was not trying to dodge between two different approaches, hoping to “adopt the most profitable at the end of the day.”
The Court of Appeal said that “the question was not the Home Office's motive for its change of mind, but whether it was legally entitled to invoke the mobility clause.” And it was because there was nothing in Curling to suggest that employers cannot invoke a mobility clause just because a redundancy situation might arise.
The second issue was whether the contractual redundancy procedure applied. The Court said that “the Home Office was bound to follow the redundancy procedure in the event of dismissals on grounds of redundancy or when dismissals on account of redundancy are proposed. If, however, Home Office preferred to invoke a mobility clause in order to avoid redundancy dismissals, it was entitled to make that choice. As it took that course, then it was unnecessary to follow the redundancy procedure.”
It said that conclusion was not affected by the fact that the Home Office initially considered following a redundancy procedure. There was no requirement to apply it just because Waterloo was being closed and there was a possibility of dismissals.
The vital first question was whether the Home Office was dismissing, or proposing to dismiss, the men by reason of redundancy. It is only if a dismissal is proposed or has taken place that tribunals have to consider whether redundancy was the reason for the dismissal and whether there was an obligation to consult.
By the time it announced the closure of Waterloo, the Home Office had decided to exercise its contractual right to move the men in accordance with their mobility obligations. It was not proposing to dismiss them and so the redundancy procedure did not apply.
The approach taken by the Court of Appeal reinforces the position of employers wanting to avoid compulsory redundancies and may have widespread implications, particularly in the public sector. It highlights the importance for employees of participating in their employers’ consultation process.
Employers who seek to rely on mobility clauses rather than making employees redundant must, however, follow the well established principle set out in United Bank Ltd v Akhtar (1989, IRLR 507) that a mobility clause should not be exercised capriciously.