You’re a business based in Great Britain with a presence in Northern Ireland and you’re making redundancies across the board. Each country has different laws so how will that affect your plans? It’s a question we are often asked.
Employment law is a devolved matter in Northern Ireland and in recent years there has been a growing divergence between GB and NI. In Northern Ireland employment law has remained largely static, while there have been a number of significant changes in Great Britain. Employers need to be mindful of the differences in both jurisdictions, especially during redundancy exercises when, in many case, the stakes are high.
So, what are the differences and why do they matter. On the line from Belfast to help with that, Craig Patterson:
Craig Patterson: “Whilst the employment laws in Great Britain and Northern Ireland have for a long time a lot of similarities, the main differences in redundancy can be divided into your individual redundancies and the collective random redundancies. So, in respect of individual redundancies, the main difference which employers need to be aware of is that the statutory dismissal procedure still applies in Northern Ireland, whereas it now doesn't in Great Britain. The statutory dismissal procedure is quite straightforward. It's three steps, namely, the first step being a statement of grounds of action and inviting the employee to a meeting. Step two being the meeting itself and issuing the decision and step three, conducting the appeal meeting if the decision is appealed by the employee. So quite straightforward and, commonly, employers’ policies will follow that regardless of the fact that it's not a statutory process as such, but it is important because if you fail to follow the statutory dismissal procedure it is an automatic unfair dismissal, so it is important for employers to get it right.”
Joe Glavina: “Can you tell me about collective redundancies, Craig?”
Craig Patterson: “In terms of collective redundancies then there are a few main areas where there is significant divergence from Great Britain. So, firstly, when we're looking to see have we actually triggered collective consultation obligations here. One of the things that needs to be factored in is the fact that certain dismissals, which are not included when considering whether you've hit collective consultation in Great Britain, do need to be included in Northern Ireland. So, for example, fixed term contracts lasting more than three months, whether they're coming to a natural end or not, do need to be included in Northern Ireland, whilst they don't need to be included in Great Britain. If you then find that you have triggered collective consultation in Northern Ireland, you do need to file a separate HR1 form with the Department for the Economy in Northern Ireland. Then we need to look at the appropriate representatives. So, it's important to consider are the employees in Northern Ireland being represented by appropriate representatives in respect to the collective consultation process? This is particularly important where you decide to do a UK-wide process because there is a risk that if the appropriate representatives are too GB focused, that the Northern Irish employees are found not to have appropriate representatives and that can expose the business to potential protective awards claims. The other important difference between Great Britain and Northern Ireland is around the periods of consultation that's required in a collective consultation process. So, like in in Great Britain, where you are proposing dismissing between 20 and 99 employees it is a minimum 30-day consultation period. However, where you're proposing to dismiss 100 or more employees, it remains at 90 days in Northern Ireland, unlike in Great Britain where it was reduced to 45 days. So that's a significant difference and it leads employers to consider whether to follow the longer consultation period, where you have redundancies across Great Britain and Northern Ireland, or split it into two consultation exercises. The final differences are across both individual and collective and important to bear in mind. So, in particular, the right to bring a claim of unfair dismissal only requires one year's continuous employment in Northern Ireland and not two years as in Great Britain and, secondly, whenever you are looking at calculating the costs of a redundancy exercise it's important to remember that because of the higher weekly pay cap in Northern Ireland, your redundancy costs will be higher in Northern Ireland than the comparable employees in Great Britain. So, those would be the main differences to be aware of when looking at a process covering Northern Ireland and Great Britain.
Joe Glavina: “How does this issue arise in practice? Is it typically where you have a business with a presence in both Great Britain and Northern Ireland?”
Craig Patterson: “Yes, typically this issue arises where you have an organisation that perhaps is predominantly headquartered, or has the bigger presence, in Great Britain and has a smaller presence, perhaps, in Northern Ireland, and the decision from the businesses to take a focus on the UK presence as a whole, so not appreciating the differences between Great Britain and Northern Ireland terms of employment law. So, the process is driven from the GB angle, as opposed to, as I say, identifying that there are significant differences between both jurisdictions.”
Joe Glavina: “If a business gets this wrong what’s the biggest risk in cost-terms? Is it protective awards?”
Craig Patterson: “Yes, I suppose biggest cost risk would predominantly be your protective award because of the fact it's 13 weeks gross pay and if you're looking at a collective redundancy process, you're already talking at least about 20 employees with that potential claim. Then, on top of that, you do have the issues around general unfair dismissal awards, potentially, as well if the process goes wrong. Now, the statutory dismissal procedure doesn't apply where it's a collective consultation exercise, but that doesn't mean that there might not be other unfair dismissal claims arising from a process that hasn't followed fair process.”
We have added this programme to our FAQs series of programmes. To find them just type ‘FAQ/redundancy’ in the search engine of the Out-Law website.