Fire and Rehire: How to Lawfully Relocate Employees, Is Refusal Misconduct?
Relocating employees for business reasons can raise numerous issues. Whether driven by restructuring, cost savings, or operational changes, employers must handle relocation carefully to avoid legal risk. Further below, we outline some potential options for employers including mobility clauses, redundancy, and the use of fire and rehire, and explain how to manage this process fairly and lawfully.
What Does the Contract Say About Location?
As a first step, it is crucial to examine the wording of the employment contract. Most importantly, does it include a mobility clause? For example, a mobility clause can look like: “You may be required to work at any UK office”
If you have the above in a contract (which is clearly worded), then you’re able to require relocation as an employer provided you act reasonably. How employers implement relocation is important.
For example, in United Bank Ltd v Akhtar, an employee was told he had to move cities with less than a week’s notice. The tribunal did not agree with the employer’s approach in handling this and therefore, the employee successfully claimed constructive dismissal.
If the Contract Ties the Employee to a Specific Location
If a contract says an employee will be based at a certain office location, with a possibility to working elsewhere within a reasonable commute then this is an effective clause however a relocation to somewhere outside a reasonable commute would not be allowed.
What can Employer’s Do?
- Try to Agree the Relocation
The most straightforward (and safest) option is to ask employees to agree to the change. That means negotiating new contract terms — which could involve salary uplifts, relocation support, or other benefits. Depending on your company, this might be handled individually or via a union. The negotiations may be individual, or it may be collective and part of a collective bargaining process.
- What if an Employee Says No? Two Options: Redundancy or Fire and Rehire.
You cannot change a contract without an employee’s consent.
Option 1: Redundancy
If the employee’s job at the original location is no longer required, the employee refuses to relocate and there’s no valid mobility clause, this would usually be cause for a redundancy situation. This is because an employer is effectively ceasing business operations at the employee’s original location, even though the role still exists elsewhere.
Employers would seek consent from those willing to move and then begin a redundancy consultation process for those who aren’t. Collective consultation rules could apply if 20 or more employees are affected.
Option 2: Fire and Rehire
If an employer’s reason for moving is for business purposes and agreement isn’t possible, then the fire and rehire route is possible.
This means that employers can:
- Terminate the existing contract with notice.
- Offer re-employment on the new terms — with the new location included.
- If the employee refuses, their employment ends.
Courts have accepted that refusing new terms can be a fair reason to dismiss, provided that the employer has followed a proper process. A “proper process” includes:
- A solid business case for the change.
- Meaningful consultation.
- Fair notice periods.
- Evidence that you (as the employer) genuinely tried to avoid dismissal.
Employees are able to bring a claim for unfair dismissal if they feel that they were unfairly dismissed, and tribunals will look at whether the employer’s actions were within the “range of reasonable responses”.
New Legislation on Fire and Rehire
Fire and Rehire (if used reasonably) is currently legally allowed. However, the government has proposed changes under clause 23 of the Employment Rights Bill (the “Bill”) which would insert a new ground of automatic unfair dismissal. This would say that a dismissal will be unfair if the principal reason for it is that the employer sought to vary the employee’s contract of employment, and the employee did not agree to the variation.
The only way the dismissal could now be considered fair is if it the business is facing serious financial difficulties.
Employers would therefore be unable to dismiss someone for the sole purpose being that they won’t agree to move.
Our Advice to Employer’s
If you are planning a relocation:
- Review your contracts. Do mobility clauses cover the move?
- Engage early with employees and representatives.
- Explore alternatives. Can some roles remain remote? Is a partial relocation possible?
- Take legal advice before considering fire and rehire — especially when considering that the law may soon change on this practice.
If you are an employer or employee affected by the above issue and want advice or support in connection with the same, or any employment law or HR issues more generally, please do not hesitate to contact us on 01206 239 761 or call our head office on 01473 229 200. Our receptionist will connect you to the right probate team – Colchester, Woodbridge, London, or straight to Ipswich.
