Worthingtons Solicitors

Strict rules apply on redundancy consultation process with staff

Whilst the country continues to slowly make its way out of lockdown, with restrictions being relaxed on an almost weekly basis in Northern Ireland, unfortunately lockdown, as a result of the Covid 19 pandemic, will seemingly leave a significant footprint on the country’s economic landscape, with businesses small and large, likely to be in recovery for some time, if not closing their doors entirely.

Despite the Coronavirus Job Retention Scheme (furlough scheme) being introduced by the UK government in March to limit the impact of UK businesses, retail giants such as Marks & Spencer’s and Debenhams have recently given notice to their workforce of hundreds of job losses due to the impact of lockdown.

In the event an organisation is faced with a similar stark reality of making a significant number of employees redundant, the NI employer must be aware of its legal obligations before commencing such a process. Where an employer proposes to make large scale redundancies of 20 or more employees within a period of 90 days or less at a single establishment, it must consult on its proposal with representatives of the affected employees and inform the Department for the Economy of its intentions. This is known as collective consultation.

Affected employees are those affected by the proposed dismissals or by measures proposed to be taken in connection with the dismissals. Where any of the affected employees fall into a category in respect of which a trade union is recognised, the trade union must be consulted. In other cases, the employer may consult with representatives directly elected by the affected employees. When elected representatives are necessary, legal rules govern their election.

For the NI employer, consultation must begin in good time. Certain minimum time periods apply depending on the scale of the redundancies proposed. Where 100 or more redundancies are proposed, consultation must begin at least 90 days before the first dismissal takes effect. For fewer than 100 redundancies but more than 19, the minimum period which must elapse is 30 days. These time periods act as a moratorium, in effect, giving adequate time for the employer and affected employees, to meaningfully consult and discuss ways to prevent redundancies from occurring. Generally speaking, if a Tribunal did not believe that an employer meaningfully consulted with an employee or his representatives during the redundancy process, this may lead to a finding of unfair dismissal.  

The repercussions for an employer in breaching their legal obligations to collectively consult can be serious. Failure to comply with any of the rules on information or consultation, or on the election of representatives, can lead to a protective award being made by an Industrial Tribunal. The maximum protective award is up to 90 days’ gross pay for each dismissed employee. The statutory cap on a week’s pay does not apply. In such circumstances, the employer is likely to face a group legal action whereby any awards granted by the Tribunal could add up to a substantial figure.

Niall McMullan is a Partner in the Employment Team in Belfast who advises clients regularly on all aspects of employment law, to include collective and individual redundancy obligations. He can be contacted on 028 9043 4015 or on email at niall@worthingtonslaw.co.uk.

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