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21 March 2018
A growing workforce, strategic expansion or the end of a lease can force businesses to relocate their premises or employees. While such changes are often positive, relocation can pose a number of practical and legal issues that should be carefully negotiated in order to minimise disruption to the business and employees and reduce exposure to employment-related claims.
Two recent unfair dismissal decisions provide useful guidance on business relocation.
Employees may be unhappy with a geographical change to the workplace. It may affect their daily commute, living arrangements or carer responsibilities. As such, a direction to relocate may prompt employees to bring claims including:
Relocation did not amount to constructive dismissal
In Ghate v Winder Controls Australia Pty Ltd (2017 FWC 5831) an employee argued before the Fair Work Commission that she was forced to resign after her employer moved its Sydney operations 34 kilometres from Macquarie Park to Glendinning.
The employee referred to her additional travel time and the effect on her work-life balance, personal wellbeing and health.
The commission dismissed the application on the grounds that:
In the commission's view, the latter point undermined the employee's argument about the unreasonableness of the employer's expectation that she should relocate, particularly when the employer had proposed alternatives such as covering certain costs (at least as an interim measure) through the payment of road tolls and fuel in connection with use of her private vehicle.
Unfair dismissal for refusing to move from Byron Bay to Sydney
In Parkes v Fat Prophets Pty Ltd (2017 FWC 6121) a sales representative had moved to Byron Bay from Sydney after his wife secured a job in the region. It was agreed that he would temporarily work from home, ahead of the planned opening of a Gold Coast office, to which he would then commute.
However, the proposed Gold Coast expansion was abandoned and, following a review of the arrangement to work from home, the employer directed the employee to return to Sydney. When the employee refused, his employment was terminated the following day, effective from the previous day.
In defending the unfair dismissal application, the employer argued that the employee had been dismissed for failing to follow a lawful direction. The commission found that while the direction may have been lawful, it was unreasonable in the circumstances.
The commission found that while the employer's chief operating officer (COO) may have told the employee that he could have time to discuss a move with his wife and that the company would consider a relocation timetable, the COO regarded the employee's blanket refusal to leave Byron Bay as rendering these steps unnecessary. The commission stated:
"I consider [the employer's] hasty jump to a conclusion that such steps would not alter the [employee's] resolve was unreasonable… From an objective standpoint, giving an employee little or no notice of a work relocation, some 772 kilometres away from where the employee had lived and worked for six months, is manifestly unreasonable."
The commission held that a more prudent course would have been to inform the employee of a reasonable timeframe (eg, two weeks) in which to indicate his preparedness to move, subject to an agreed timetable and suitable relocation expenses (eg, penalties for breaking his existing rental lease and removal costs).
The employee was awarded A$8,350.
The following tips can help employers to minimise the risks associated with business relocation:
For further information on this topic please contact Neil Napper at Lander & Rogers' Sydney office by telephone (+61 2 8020 7700) or email (email@example.com). Alternatively, contact Emma Purdue at Lander & Rogers' Melbourne office by telephone (+61 3 9269 9000) or email (firstname.lastname@example.org). The Lander & Rogers website can be accessed at www.landers.com.au.
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