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Mass redundancies during the COVID-19 pandemic

Unfortunately, as a consequence of the pandemic, we are seeing more and more mass redundancy exercises being implemented by employers.

When an employer proposes to dismiss as redundant 20 or more staff in one establishment within 90 days, they are under a duty to provide various pieces of written information and consult with their ‘appropriate representatives’. Such obligations remain even in insolvency circumstances. If employers don’t inform/consult such representatives, in line with statutory requirements as set out in the Employment Rights (NI) Order 1996, the employer may be liable to pay each affected employee compensation.

Once there is a proposal to dismiss, consultation must begin “in good time”, but in any event must be, in Northern Ireland:

  • 90 days before the first dismissal if 100 or more redundancies are proposed within a 90 day period
  • 30 days before the first dismissal if fewer than 100 redundancies are proposed.

If there is a recognised union at the workplace, then the employer has to consult with the trade union as appropriate representatives for employees covered by such recognition.

If there is no recognised union then the employer can choose to consult with other appropriate representatives, either employee representatives who were appointed or elected for a purpose other than for redundancy consultation, but who have authority from employees to conduct the consultation or have been specifically elected for the purposes of redundancy consultation.

The consultation must include ways of avoiding the dismissals, reducing the number of employees to be dismissed and mitigating the consequences of the dismissals, and with a view to reaching agreement with the appropriate representatives.

If the employer fails to inform/consult as required, then the union/appropriate representatives can bring a claim for a protective award securing up to 90 days’ pay for affected employees including those who have been dismissed, or whom it is proposed to dismiss, as redundant without complying with the statutory requirements for consultation etc.

Payment can then be claimed through the government’s National Insurance Fund in insolvency situations subject to a cap of up to eight weeks’ pay with a maximum weekly rate (as of April 2020) of £560.00.

Thompsons NI

Chambers UK, a leading guide to law firms and solicitors in the United Kingdom, rank Thompsons NI as a Band 1 firm recording lawyers rated as excellent undertaking both personal injury and employment rights work.