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Collective redundancy changes could cause problems for firms with Northern Ireland workers, says expert

Companies with some workers in Northern Ireland could run into problems if they need to make large-scale redundancies once changes to consultation requirements come into force elsewhere in the United Kingdom, an employment law expert has warned.20 Dec 2012

The Government announced earlier this week that the minimum consultation period that must take place where more than 100 employees are at risk of redundancy will be cut to 45 days from April next year.

However Adam Brett of Pinsent Masons, the law firm behind, said that the change would not take place in April in Northern Ireland  and may not take place at all .The  Department for Employment and Learning deferred a consultation on similar arrangements in November and Brett said that it remains to be seen whether this issue will be included in proposals and a formal consultation due to commence in the first half of next year The Northern Ireland Assembly has responsibility for employment law.

"Until any change where Northern Ireland employees are involved, they will remain entitled to collective consultation lasting 90 days," Brett said. "This in turn may make it difficult to finalise redundancy criteria or terms, and may effectively slow down a UK-wide redundancy process if the employer cannot complete the consultation on selection in Northern Ireland in less than 90 days."

Collective redundancies are those which involve 20 or more employees at a 'single establishment' within 90 days. Under the current system, an employer which proposes to make collective redundancies must consult on its proposals with unions or representatives of the affected employees. Where an employer is proposing to make more than 100 employees redundant it must allow for at least 90 days consultation, while a minimum consultation period of 30 days applies where between 20 and 99 employees are potentially affected.

There is considerable uncertainty as to what counts as a 'single establishment' for the purpose of the consultation requirement, as this is governed by European  and local case law. Brett said that, depending on the circumstances, employees in Northern Ireland who report to a central 'base' shared with workers from elsewhere in the UK could be able to argue that they form part of a larger establishment if large-scale redundancies are proposed.

"The 'single establishment' will usually - and fairly obviously – refer to an establishment in Northern Ireland, but there are a number of atypical workers who may be able to argue firstly residency in Northern Ireland, so that the 90 day requirement and the Northern Irish tribunal jurisdiction applies, but secondly that in the absence of a specific establishment the threshold of 100 may include employees in Northern Ireland and Great Britain who work from one central location," he said.

"I suspect this will not be common but it may be an issue for highly unionised environments, such as financial services and outsourced public sector businesses. It could also apply to businesses with sales forces based in Northern Ireland reporting to Great Britain, and construction companies working on GB projects," he said.