Brown & Root (UK) Ltd v Ewer

A workplace closure may create a redundancy situation, but it does not itself establish the employer’s reason for dismissal. Under section 98 of the Employment Rights Act 1996, the tribunal must identify the facts or beliefs which genuinely caused the employer to dismiss.

Where an employer invokes a mobility clause and dismisses employees because they refuse an instruction to relocate, the reason may be conduct notwithstanding the workplace closure. A statutory redundancy payment is then unavailable. The dismissal may nevertheless be unfair. Its fairness requires consideration of the contractual legitimacy and reasonableness of the instruction, and of the reasonableness of the employee’s refusal.

The employer closed its Greenford workplace and instructed two employees, including Mr Ewer, to work at Leatherhead under a contractual mobility clause. Both refused because of the substantial increase in travelling time. They were dismissed following disciplinary processes for failing to obey the relocation instruction.

The Employment Tribunal held that the dismissals were by reason of redundancy, awarded statutory redundancy payments, and found the dismissals unfair. The employer appealed. The central issues were the true reason for dismissal where a mobility clause had been invoked against a background of workplace closure, and whether the Tribunal’s alternative findings of unfairness could stand.

1. Appeal allowed in part. The appeal against the awards of statutory redundancy payments was allowed. The appeal against the findings of unfair dismissal was dismissed.

2. The Tribunal erred by beginning with the existence of a redundancy situation under section 139 of the Employment Rights Act 1996 and allowing that finding to determine the reason for dismissal. The correct inquiry was the Abernethy inquiry: what facts or beliefs genuinely operated on the employer’s mind when it dismissed.

3. On the Tribunal’s own findings, the employer believed it could require relocation under the mobility clause and dismissed the employees because they refused that instruction. The operative reason was therefore conduct-related, not redundancy. The workplace closure did not prevent reliance on that reason. Consequently, no statutory redundancy payment was due.

4. The error on reason did not determine the unfair-dismissal claims. The Tribunal had made alternative findings which, read fairly and as a whole, addressed the employer’s own three questions: whether the instruction was contractually legitimate, whether it was reasonable to give it, and whether refusal was reasonable.

5. The Tribunal permissibly found that the widely drawn mobility clause lacked sufficient certainty in its operation, that its invocation was unreasonable, and that each employee’s refusal was reasonable in light of the additional travelling burden and personal circumstances. Its reasons were adequate and its conclusions were neither perverse nor the product of substitution. The findings of unfair dismissal accordingly stood.

• Employment Appeal Tribunal: Allowed the employer’s appeal on statutory redundancy payments, but dismissed its appeal on unfair dismissal.
• Employment Tribunal, Watford: In separate judgments sent on 6 April 2016, held that the employees were dismissed by reason of redundancy, were entitled to statutory redundancy payments, and had been unfairly dismissed.