Traps for the unwary: employment law in Northern Ireland
With all the recent discussions regarding Northern Ireland (NI) and ‘regulatory alignment’ you might be forgiven for believing that all laws, including employment laws, are the same across the UK. However, since the devolution of powers to the NI Assembly in 1999, the divergence between employment law in Great Britain (GB) and NI has continued to increase.
In GB, discrimination is covered by the Equality Act 2010 (the Act), which protects people from discrimination in the workplace and in wider society. It does not apply to NI, which has retained separate pieces of discrimination legislation relating to race, disability, age, sex (including pregnancy and marital status) and sexual orientation, mirroring those in force in GB prior to the Act.
In addition, in NI, the Fair Employment & Treatment (Northern Ireland) Order 1998 (FETO) was enacted to address sectarian discrimination by making it unlawful to discriminate against individuals on the basis of their religious belief and political opinion. Under FETO there is a statutory requirement for employers of more than ten people to register with the Equality Commission for NI and provide annual returns with information on the religious composition of their workforce, and to carry out periodic reviews thereadefter. Employers who fail to register or submit a return can be fined or imprisoned.
Unfair dismissal law is broadly similar in both jurisdictions. Indeed the test of fairness is based on much of the same case law, however there are some key differences which could catch unsuspecting employers and their insurers unawares.
The most notable difference is the qualifying period of employment required before an employee can bring a claim of unfair dismissal, which remains at one year in NI, as it did not increase to two years in 2012 as it did in GB. A government consultation undertaken in 2013 considered the merits of extending the qualifying period in NI, however the Department for Employment & Learning declined to do so despite opposition to this decision.
In addition, the statutory dismissal and disciplinary procedures remain in force in NI. These procedures require employers to take certain mandatory steps prior to dismissing an employee, to include a compliant letter to invite an employee to a meeting at which they have a right to be accompanied and a right to appeal an employer’s decision. Employers must ensure they comply with these statutory obligations when terminating an individual’s employment or a dismissal will be deemed ‘automatically unfair’.
The calculation of awards for unfair dismissal also differs In NI. The maximum amount of a week's pay used to calculate basic awards is higher, currently at £547 as opposed to £508 in GB. Further, compensatory awards for unfair dismissal are not limited to one year's pay as in GB but instead are subject to the discretion of the Tribunal up to a statutory maximum of £86,614. Employers are therefore exposed to potentially higher Tribunal awards in NI than in GB.
Wages and holiday pay
The two-year limit on holiday pay and other unlawful deduction claims, introduced into GB by the Deduction from Wages (Limitation) Regulations 2014, does not apply in NI. As such, there is no limit to the period an employee can claim for underpayment of wages and holiday pay, provided certain criteria is met, which has left NI employers exposed to considerably higher awards than their counterparts in GB.
Delayed changes: early conciliation, gender pay gap reporting and collective consultations
Due to the collapse of the NI Assembly in January 2017, many new pieces of legislation have not yet been implemented. For example, the Employment Act (Northern Ireland) 2016, which sets out the framework to make changes to the operation of Industrial Tribunals and the Fair Employment Tribunal, including introducing pre-claim conciliation and introducing gender pay gap reporting, are not yet enacted. Despite receiving Royal Assent on 22 April 2016, many of the main provisions of the Act await regulations for commencement. Due to the ongoing political impasse in NI there is no known timescale for their implementation.
NI has also not introduced the amendments to collective consultation requirements on redundancies enacted on 6 April 2013 in GB under The Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment) Order 2013. For now, therefore, where 100 or more redundancies are proposed, the minimum consultation period required remains 90 days, as opposed to 45 days in GB. In addition, unlike in GB, fixed term contracts are not exempt from the calculation of the number of proposed dismissals, which triggers collective consultation.
Whilst the rules are broadly similar in both jurisdictions, there are key differences that businesses need to be aware of to reduce the risk of claims and employers should be aware that minor variations in legislation and tribunal interpretation in NI can prove determinative in what are often finely balanced cases.
To minimise risk we recommend that businesses review their contracts and policies to ensure that they are up to date and compliant with the law in NI. Employers should avoid the temptation to apply GB policies and procedures to NI staff without first establishing whether they are applicable in NI. We recommend that employers ascertain the legal position in NI before embarking on any consultation or decision-making process affecting their staff that could result in the termination of their employment.
In a quickly evolving area of law, the continuing absence of a government in NI means that discrepancies between both jurisdictions are likely to increase over time.
Read other items in Commercial Brief - May 2019
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