Northern Ireland: 'Good Jobs' consultation – What are the key areas for employers to consider?

Proposed changes to zero hours contracts

As a reminder, a zero hours contract is type of casual worker contract under which someone is engaged without there being a minimum level of guaranteed work or pay. In some situations, the individual worker is obliged to accept any work offered, but this is not always the case. In 2015, the Conservative government in GB banned exclusivity clauses in these types of contracts, meaning zero hours workers were free to work for other organisations. Exclusivity clauses have not been banned in NI, although this was proposed before this current consultation, which we covered here.

This type of contract provides significant flexibility for both parties, enabling employers to manage fluctuating demand and individuals to fit work around other commitments. However, in recent years they have been the subject of scrutiny and debate. As we explored here, the reasons for this are wide ranging but largely boil down to the potential for uncertainty and insecurity for the individual worker.

Proposed change to the holiday pay calculation reference period

An employee or worker is entitled to receive 5.6 weeks’ paid holidays in each leave year, consisting of four weeks leave based on EU law and 1.6 additional weeks provided under domestic law. For many workers, the amount of pay received for their holiday depends on their hours worked and how they are paid. Pay received during leave should reflect what the worker would have earned if they were working, e.g., this is expected for workers who receive fixed pay. This becomes more complicated for workers with irregular hours and variable pay, who do not receive the same amount in each pay period.

In NI, the current position for workers with variable hours and pay is that employers should look back at the worker's previous 12 weeks’ pay (known as the holiday pay reference period) to calculate their pay for a week’s leave. This method can be burdensome for employers and may result in incorrect entitlements which do not reflect an employee’s normal pay, especially for workers with seasonal or irregular hours. Using the 12 weeks’ pay approach also goes against the Supreme Court’s findings in the Agnew case that the reference period “is a question of fact” and the “pragmatic reasons” for a 52-week reference period.

Proposals regarding a right to disconnect

As we previously explored here, the right to disconnect or switch off from work is a growing trend around the world, originating in France when it introduced legislation in 2017, followed by countries such as Italy and Spain. Ireland introduced a Code of Practice on the right to disconnect in 2021, which aims to create a culture of good work-life balance and break bad habits where people feel obliged to respond to messages out of hours.

In GB, introducing a right to disconnect was first discussed in Labour’s 2021 Green Paper, with a promise to bring in the “right to switch off” which would be “a new right to disconnect from work outside of working hours and not be contacted by their employer”. Although the right to switch off was not mentioned in the King’s Speech on 17 July 2024, this is likely to remain on the agenda for GB legislative reform.

In NI, there is currently no specific legislation governing the right to disconnect outside of working times, rather, more general rules surrounding working hours and rest entitlements are set out in the NI Working Time Regulations.

Proposed changes to trade union activity (workplace access and recognition)

In Northern Ireland, trade union officials have limited statutory rights to access workplaces such as during a collective redundancy process. They also do not have specific rights to access workplaces for the purpose of operating a trade union or to recruit and discuss membership. Trade unions have long complained that this position has constrained their ability to recruit and represent new members, which may ultimately be contributing to falling levels of trade union membership, particularly in the private sector.

Recognition of trade unions is also limited; they can request to be ‘recognised’ by employers so they can negotiate agreements on pay etc, but if employers don’t voluntarily recognise, they must apply to the Industrial Court for recognition. For the Industrial Court to accept an application for recognition, the employer must employ at least 21 workers.

The consultation sets out an intention to develop, enhance and modernise the operation of trade unions, and whilst the impact of some of the proposals may be relatively confined to specific and traditionally unionised sectors, some may potentially affect all employers in every sector. It will be down to the trade union movement to see if they can make the most of any potential reforms, but there is clearly scope for these proposals to add up to a shift in the legal and industrial relations landscape. We highlight the most significant proposals below.

Proposed changes to TUPE information and consultation requirements

The TUPE Regulations require employers to inform and (if necessary) consult with ‘appropriate representatives’ of employees affected by the transfer of their employment to a new company. These ‘representatives’ are typically recognised trade unions or elected employee representatives.

As we previously explored here, 2014 reforms in GB permitted micro-businesses (those with fewer than 10 employees and no union/elected representatives) to inform and consult directly with employees rather than through employee representatives. Further to additional 2023 reforms, for transfers taking place on or after 1 July 2024, employers in GB are also now permitted to consult with employees directly when one of the following is satisfied:

• the business employs fewer than 50 employees, irrespective of the size of the transfer; or
• the proposed transfer involves fewer than 10 transferring employees, irrespective of the size of the business.

Neither the 2014 nor 2023 exemptions have been implemented in NI meaning that, strictly, all employers must comply with their information and consultation obligations with their union/elected representatives. In practice, some small employers in NI invite employees to agree that they will all be representatives, and all consulted together.

What should employers do next?

Significant reforms to NI employment law are proposed in the consultation, which closes on 30 September 2024. Now is therefore an important time for you, as employers, to review and engage with the proposals and share views on how the proposed changes could affect your business.

The 'Good Jobs' Employment Rights Bill consultation is available here and on page 9 of the consultation document, details are included about how to respond to the consultation.

Our NI Employment Law Reform Impact Hub is available here and our full analysis of all the proposals (and not just these high impact proposals) is available here.

When will these changes happen?

Nobody can say with certainty when these changes (on the basis they proceed in their current form), will be implemented. The 'Good Jobs' Employment Rights Bill is only at the consultation stage. Once this closes on 30 September 2024, there will be a number of months during which the public’s responses will be reviewed and assessed, before a draft bill is produced. That may then be rejected, or more likely amended during passage through the NI Assembly. There may then need to be regulations and a period for implementation. So realistically, changes may not be implemented until 2025 or 2026 - however, given some of the proposed changes are significant, employers are advised to prepare well in advance.