Important Considerations When Changing Employee’s Work Location in Asia

As countries emerge from the restrictions imposed by COVID lockdowns, companies are facing the economic challenge of underutilised building facilities.  Consolidating and relocating employees to a new site may need to be proved as “reasonable” in some Asian countries.

In jurisdictions such as the USA where not withstanding specific terms and conditions in individual contracts or collective agreements, the relocation of an employee’s place of work is a less onerous procedural task.  While doing so may impact employee engagement and attrition, the employer has greater flexibility to implement such a change.

However, in many other countries, changing an employee’s place of work may be subject to employment contract obligations, the labour laws – or both.  In Thailand, there are notification procedures depending on whether the move is related to a closure or consolidation of buildings, or purely a shift of the employee’s place of work.   In the case of a building closure or consolidation, an employee may successfully argue that their ‘ordinary life’ (or that of their family) has been impacted, triggering severance provisions.

While similar laws do not exist in Australia, a complaint to the Fair Work Commission would assess whether the relocation was considered reasonable, on many similar grounds to Thailand.  Factors including employment contract clauses (either written or implied), the distance between the locations, the employee’s career and family responsibilities, any additional costs to be borne by the employee (such as fuel, public transport, rent), and overall disruption to the employee and their family – are all elements which can be considered.

The findings in an 18-year-old complaint still hold true in Australia.  In the 2004 case of Han Jian Liu v NHP Electrical Engineering Products Pty Ltd , the company planned to close down their facility in one suburb and relocate all employees to the factory site approximately 25 kilometres away.  The company offered support with relocation costs and flexible working hours.  However, the tribunal found in favour of the employee’s demand for redundancy on the basis that:

• His employment contract stated that his place of work was the original site; Mr Han had been employed for 16 years at the site.
  
  
• The employment at the new site would be considered a new contract of employment.
  
  
• Mr Han was unable to perform the new role because of the additional distance and travel time required and the adverse impact on his family responsibilities.
  
  
• Consequently, the role was not a reasonable or acceptable alternative employment.

 Outlook for employers: As more companies evaluate the impact of hybrid working arrangements on their physical real estate, it is important to understand the obligations surrounding workplace decisions.  Equally so, companies seeking to simply restate the employee’s work location as ‘home office’, thereby relinquishing all physical building sites, will still have place-of-work obligations to assess and satisfy.