What a hardship clause is
A hardship clause in a relocation contract is the section that addresses what happens when a posting goes wrong. The clause sets out the family's entitlements if the role ends earlier than planned, if the destination becomes unsafe, if a family member falls seriously ill, if a partner cannot work, or if a child's educational placement breaks down. Without a hardship clause, the standard relocation policy applies, which is usually designed around a successful five year posting and rarely accommodates the messier reality.
The clause does three useful things. First, it confirms that the employer will fund the cost of an early return to the home country if defined hardship triggers occur. Second, it confirms what happens to school fees, housing costs and notice periods at the destination during the unwinding of the posting. Third, it sets out the process for invoking the clause, which prevents a hardship from becoming a contested negotiation at the worst possible moment.
Why it matters for families with children
Families with school age children carry more hardship exposure than single executive postings. The school enrolment contract sits in parallel to the employment contract, with its own notice period, financial settlement, and academic year alignment. A relocation that ends in March exposes the family to a full term of school fees if the school's notice period falls into the next term. A child mid IB or A-Level pathway cannot, in many cases, be transferred mid year without an academic cost. A child with identified SEN whose new school's support has stalled may need to be moved before the posting ends, which is its own form of hardship.
The standard relocation package rarely accounts for these cases. The package assumes a successful posting and a clean exit at the end of the contracted period. When the actual exit happens earlier or messier, the family bears costs the package was never structured to absorb. A well drafted hardship clause moves those costs back to the employer where they belong, particularly where the trigger is not the family's fault.
Free relocation contract checklist
A printable checklist of the twelve clauses that matter most in a relocation contract, with the language to look for and the questions to ask HR before signing.
Get the packFive protections every relocation contract should include
1. Defined hardship triggers. The contract should list the events that activate the hardship clause. Standard triggers: serious illness of the executive, partner or child requiring repatriation; deterioration in destination security; the destination employer entity dissolving; the family being unable to obtain or renew necessary visas; the death of an immediate family member. Each trigger should have a clear, documentable test.
2. School fees notice cover. The clause should commit the employer to funding the school's notice period in full when the hardship trigger is invoked. This is usually one term's fees per child and is the single largest one off cost of an early exit. Without explicit cover, the school invoices the family.
3. Repatriation cost cover. Standard repatriation provisions usually cover only the originally scheduled end of posting. The hardship clause should extend this to early termination cases, covering air freight, sea freight, temporary accommodation at both ends, and the practical costs of unwinding the destination life.
4. Tax equalisation continuity. Tax equalisation usually runs until the end of the contracted posting. If hardship triggers an early exit, the partial year tax position becomes complicated and can produce a surprise tax bill in either country. The clause should commit the employer to maintaining tax equalisation through the actual exit date, not the originally scheduled one.
5. Return role definition. The cleanest hardship clauses commit the employer to a defined home country role on return, with a salary band, a reporting line and a start date. Without this commitment, the executive returns to a generic redeployment process, often at a lower band, which compounds the hardship for the family.
Common gaps in standard packages
Three gaps appear most often in standard relocation contracts. The first is silence on school fees during an early exit, with the implicit assumption that the family will absorb the school's notice period. The second is silence on the partner's position, particularly where the partner has given up a career to follow the posting and the early exit lands them in a worse position than the move started from. The third is silence on the timing of the return, with the contract treating return as the end of a defined period rather than an event that may happen at short notice.
A fourth, less common gap, is the absence of any provision for a child whose schooling is severely disrupted by the posting. This is the hardest case to draft for, because the trigger is subjective and the remedy is bespoke, but the cleanest contracts include language that gives the family the right to repatriate at company cost where a child's educational placement has failed and no acceptable alternative exists at the destination. Our wider piece on relocation with versus without employer support covers the school fees side of the equation in detail.
How to negotiate a hardship clause
Negotiation works best at offer stage, when the employer has indicated commitment and before the contract is signed. Three principles help. First, frame the request as a risk management conversation, not as a contingency request. The argument is that defined hardship terms protect both sides and reduce the likelihood of a contested unwind. Second, ask in writing for the standard policy first, and use the gaps in the standard policy as the agenda for the negotiation. Third, where a specific protection is hard to extract, ask for a reciprocal commitment from the family (a defined return service period, for example) that lets the employer offer the protection within their internal policy framework.
The hardship clause is rarely the largest negotiation item, which is why it is often a winnable one. HR is usually willing to add language that protects the family in defined cases, particularly where the cost to the company is contingent rather than certain. The negotiation that fails is usually the one that opened by asking for a long list of contingent rights with no concrete framing.
When to take legal advice
For senior postings with significant school fees exposure, legal advice on the hardship clause is usually worth the cost. An employment law firm with international mobility experience can read the standard package against market practice, identify the genuine gaps, and produce drafted language that the employer's legal team can accept. The cost is usually GBP 1,500 to GBP 3,500 for a contract review and a short drafting note, which is small against the potential cost of an unprotected early exit.
For middle management postings, the cost benefit is closer. A self read of the contract against the five protections above, plus a candid conversation with HR, usually achieves a reasonable outcome. The school finder is the right next step for families running the broader comparison of where the posting could take them, and the school finder plus the compare tool together produce the school list to put against the package.
Frequently asked questions
What is a hardship clause in a relocation contract? A section that defines what the employer will fund if the posting ends earlier or messier than planned. Triggers, school fees cover, repatriation cost, tax equalisation and return role definition are the five protections worth negotiating.
Are hardship clauses standard? They appear in senior level packages and most diplomatic postings. They are inconsistent in middle management contracts and usually absent in junior level packages. Always ask.
Can we negotiate after signing? Possible at promotion or renewal stage. Difficult mid contract.
What if the employer refuses? Document the refusal. The refusal sometimes affects the legal interpretation of the standard policy if a hardship event later occurs. A specialist solicitor can advise on the implication.