Redundancy in Northern Ireland – Important Considerations
30 March 2022
In light of recent decisions taken by large companies in Northern Ireland, we should utilise this opportunity as a timely reminder for businesses that a redundancy process should be followed, particularly when making any mass redundancy decisions.
Employers who propose making 20 or more employees redundant within any 90 day period or less have a duty to consult with employee representatives, this usually constitutes a trade union or elected representatives. The consultation process should begin at least 30 days before the first dismissal takes effect if 20 to 99 employees are to be made redundant. An extended consultation period of at least 45 days must occur if 100 employees or more are being made redundant.
Even if a company is smaller or only making only 1 employee redundant, it is important that a fair redundancy process is followed. This will generally consist of multiple meetings and letters with the employees that are potentially affected, ensuring a selection process is adhered to which is both fair and objective, offering the employee the right to be accompanied to meetings, exploring alternative employment options and providing an opportunity to appeal.
In an area that has multiple pitfalls, it is good to seek legal advice before enacting a redundancy process. MKB Law will be able to provide a step-by-step guide plus answer any queries that employers may have whilst enacting a process.
Failure to follow a correct redundancy process will leave a company exposed to claims for unfair dismissal and potentially other claims depending on the circumstances.
The statutory redundancy payment is calculated as follows:
- 0.5 week’s pay for each full year of service where employee age was under 22
- 1 week’s pay for each full year of service where employee age was 22 or above but under 41
- 1.5 week’s pay for each full year of service where employee age was 41 or above
There is a cap of 20 years for length of service and also for what can constitute one week’s pay, which is currently £566 in Northern Ireland at the time of writing. The Employment Rights (Increase of Limits) Order (Northern Ireland) 2022 comes into operation on 6 April 2022 which will increase this cap to £594 for redundancies made after this date.
The above calculation is in respect of an employee’s basic redundancy entitlement only which would be together with their notice pay, holidays, expenses etc. There is an array of compensatory awards that the employee could obtain by issuing proceedings against an employer who has not followed a redundancy process. The compensatory award for unfair dismissal can be up to £89,669 which will increase to £94,063 on 6 April 2022.
If you require assistance with the above or have any associated queries, please do not hesitate to get in touch with Billy Muir, Employment Law solicitor at MKB Law.