According to the latest Labour Market statistics, over the year May 2023 to April 2024, 2,380 redundancies were confirmed in Northern Ireland, more than double the figure for the previous year of 1,160. And with redundancies on the rise in Northern Ireland, it is imperative for employers to bear in mind the statutory rights available to employees facing a redundancy situation.
Although redundancy is a potentially fair reason for dismissal, an employer can incur liability for unfair dismissal for example where there is no genuine redundancy situation, the employer fails to act fairly in all the circumstances or follow a fair process. A genuine redundancy situation can usually be identified in the following circumstances:
If an employer is facing a redundancy situation, it must first identify the employees at risk of redundancy (i.e., known as the “redundancy selection pool”), consult with any affected employees and follow a fair procedure when dismissing staff by reason of redundancy.
Unless all employees are being dismissed, employers must take care to ensure that the pool of employees from which employees may be selected for redundancy is fairly defined. The employer will then need to apply suitable selection criteria to decide which of the employees in the pool will be retained and which will be provisionally selected for redundancy. The selection criteria should be objective rather than subjective and be well balanced to ensure that one individual criterion does not act alone as a deciding factor. Employers should take care to ensure that the adopted selection criteria does not discriminate on the grounds of any protected characteristic. Where there is a recognised trade union, they should be consulted in relation to the selection criteria.
Where an employer is proposing to dismiss 20 or more employees at one establishment within 90 days, the employer has a duty to undertake “collective consultation” with union or employee representatives, in addition to consulting with the employees individually. Consultation should begin in “good time” and be completed 30 days before any redundancy notices are issued. If an employer fails to properly consult with employees, it may result in the Tribunal making a declaration to that effect together with a ‘protective award’ of up to 90 days’ pay for each affected employee. An employer must also provide advance notification to the Department for the Economy at least 30 days before the first redundancy is made.
If an employee is made redundant, they may be entitled to the following payments, depending on how long they have been employed and the terms of their employment contract:
If an employer is insolvent, and an insolvent practitioner has been appointed, statutory redundancy payments may be made to the employees by the Northern Ireland Redundancy Payments Service (a branch within the Department for the Economy).
An employee may have a claim for unfair dismissal if they believe there is not a genuine redundancy situation, that the employer has not followed a fair procedure in selecting them for redundancy, that a proper consultation process has not been conducted, or the decision to select them for redundancy was one which no reasonable employer should have made.
Before bringing a claim for unfair dismissal in the Industrial Tribunal, the employee must contact the Labour Relations Agency (LRA) and make a mandatory early conciliation notification within three months from the effective date of termination of employment.
We thank the Employment Team at Millar McCall Wylie for the content of this email.
For information on employment related matters they can be contacted on: 028 9020 0050 or email mmw@mmwlegal.com.