Collective Responsibility 

Most people will have seen the recent news concerning First Trust Bank. For those of you that haven’t the Bank has announced this week that it plans to close 15 of its 30 branches in Northern Ireland this year. If the plan proceeds there will be a resulting loss of up to 130 jobs. The Bank puts this plan down to changing patterns in how people bank, with a shift away from the traditional visit to your local branch towards the use of on-line facilities.
Whilst this is undoubtedly sad news and also an indicator of how the banking world (and other sectors) is having to adapt to the way consumers want services provided there are also pertinent legal issues involved.

In general terms the situation facing the bank is one that falls within the statutory definition of redundancy. Redundancy is one of the potentially ‘fair’ reasons for dismissing an employee. Article 174 of the Employment Rights (NI) Order 1996 (the ERO) sets out different categories of redundancy as follows:

(a)the fact that his employer has ceased or intends to cease—
(i) to carry on the business for the purposes of which the employee was employed by him, or
(ii) to carry on that business in the place where the employee was so employed, or
(b) the fact that the requirements of that business—
(i) for employees to carry out work of a particular kind, or
(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer,

have ceased or diminished or are expected to cease or diminish.

Not only is the Bank considering ceasing business at certain branches it seems reasonably clear that there is less work of a ‘particular kind’ for the employees to carry out with this apparent shift to on-line services from traditional banking. Therefore the Bank would have seem to have valid grounds to dismiss employees for redundancy.

A second legal issue arises due to the potential number of redundancies that may be made. Article 216 of the ERO states that where an employer is considering making at least 100 employees redundant at one establishment within a 90 day period then it must begin consultations with the appropriate representatives of the employees (in many cases this will be the relevant union) at least 90 days before the first dismissal takes place. If it is making at least 20 employees redundant then the window of consultation reduces to a 30 day minimum. Failure to comply with these obligations can result in the employer facing the penalty of having to make Protective Awards to each employee at risk of redundancy. Each award can be as much as 90 days pay – a hefty sum with such numbers involved.

At high level the consultation will have to cover the reasons why the redundancy is required, the logistics of how the process will be conducted and any steps that can be taken to mitigate the number of dismissals required. It is relevantly common for large employers such as banks to offer a voluntary redundancy (VR) scheme to mitigate the number of compulsory redundancies. Often VR schemes will offer remuneration in excess of contractual or statutory entitlements. In return for accepting an offer of VR the employer would expect an employee to sign a compromise agreement waiving his or her right to make any claim against the employer.

The employment team at MMW have extensive experience advising in these type of situations for both employers and employees. If you need any advice on the issues raised above please do not hesitate to contact us on 02890 200050.



BREAKFAST SEMINAR- THE EMPLOYMENT ACT (NI) 2016

We are pleased to confirm that we will be hosting a breakfast seminar at our office at Imperial House, 4-10 Donegall Square East, Belfast at 9.30 am on Wednesday 10th May 2017 . At this time Jan Cunningham (Employment Partner) and Kevin Gallagher (Employment Solicitor) will consider the keys changes to be introduced on implementation of The Employment Act (Northern Ireland) 2016 and the practical implications for Employers in the workplace. This seminar is provided free of charge and refreshments will be provided on the morning.

Please note that we have limited places available for this seminar and therefore should you wish to attend please confirm your place by email to employment@mmwlegal.com

When reserving your place, please indicate if you have any access or dietary requirements.



 

 

 

 

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