Employment Rights Bill Roadmap for payroll

In 2024, a consultation was launched on a bill to promote good jobs and followed the themes laid out below. Responses came from all areas on employment. A number of measures have now been taken forwards that intend to establish basic standards for all workers.

These proposals will be taken to the Northern Ireland Executive who will agree the policies which will then be translated into a bill. Caoimhe Archibald, Minister for the Economy, hopes that this bill will be introduced to the Assembly early next year.

The measures that are successfully passed into law will then be implemented on a phased basis. We may see changes in HR and payroll as early as April 2027.

Key proposals include:

• Introduction of banded hours contracts for zero-hours workers, compensation for cancelled shifts, and restrictions on exclusivity clauses.
• Measures to prevent unfair dismissal through ‘fire and rehire’ practices, enhanced redundancy notification obligations, and mandatory written statements of employment particulars.
• Abolition of ‘pay between assignment’ contracts and mandatory Key Information Documents.
• Support for real living wage adoption, fair distribution of tips, itemised payslips for all workers, and alignment of holiday pay calculations with GB standards.
• Day-one rights for flexible working, carer’s leave, neonatal care leave, and extended redundancy protections for parents.
• Easier recognition thresholds, digital access rights, and promotion of collective bargaining.
• Lower thresholds for ICE agreements and improved whistleblowing oversight.

Key implications for employers

• Employers must prepare to offer banded hours contracts to eligible zero-hours workers and compensate for cancelled shifts.
• Dismissals related to refusal of detrimental contract changes may be deemed automatically unfair unless justified by financial necessity.
• Failure to notify the Department of large-scale redundancies could result in increased fines and personal liability.
• Employers will be required to provide detailed written statements of employment terms on or before the first day of work.
• Recruitment agencies must issue Key Information Documents and abolish ‘pay between assignment’ contracts.
• All workers must receive itemised payslips, and holiday pay calculations will use a 52-week reference period.
• Employers must maintain transparent records of tips and service charges and comply with a statutory Code of Practice.
• Flexible working becomes a day-one right, requiring employers to handle requests reasonably and transparently.
• Trade union access and recognition thresholds will be lowered, requiring employers to accommodate digital and physical access.
• Employers must prepare for electronic balloting and extended protections for employees involved in industrial action.
• Redundancy protections for pregnant employees and new parents will be extended to 18 months.
• New statutory entitlements for neonatal care leave, carer’s leave, and enhanced paternity leave will require policy updates.

Theme A: Terms of employment

Zero hours contracts

Workers who consistently and regularly work more than their contracted hours will be eligible to apply to move to a banded hours contract after completing a qualifying period. This qualifying period will be set out in regulations after further engagement with stakeholders but may be 26 weeks. An employer will be able to decline a banded hours request only in limited circumstances which will be set out in regulations. Where a worker is content to remain on this type of contract, they are free to do so.

Workers on a zero hours or low hours contract will have a right to compensation where an employer cancels or curtails a shift at short notice and will also ban exclusivity clauses in both zero and low hours contracts that do not guarantee an income above the Lower Earnings Limit.

Dismissal and Re-engagement (Fire and Rehire)

The Department intends to introduce legislation that will make it automatically unfair to dismiss an employee for refusing to accept changes to the terms of their contract. This measure is designed to protect workers from being forced into less favourable conditions under threat of dismissal.

The only exception to this rule will apply where an employer can demonstrate that the proposed changes were a necessary response to immediate financial hardship, and that there was no reasonable alternative to seeking a variation in the contract terms.

This approach is consistent with the ‘Fire and Rehire’ proposals currently under consideration in Britain’s Employment Rights Bill, ensuring alignment across jurisdictions and reinforcing protections for employees facing unjust dismissal practices.

Redundancy: offence of failure to notify

Employers are currently required to notify the Department for the Economy when they propose to make 20 or more employees redundant. The required notice period varies depending on the number of redundancies being proposed.

Failure to provide the appropriate notice constitutes an offence, which may result in a fine of up to level five on the standard scale – currently set at £5,000. At present, this responsibility lies with the employer as a corporate entity, and there is no provision for personal liability.

To enhance compliance, the Department intends to introduce legislation that would establish personal liability for breaches of redundancy notification obligations. In addition, the Department will consult with the Department of Justice regarding an increase to the maximum fine.

Furthermore, the Department plans to mirror relevant provisions from Britain’s Employment Rights Bill, particularly those aimed at extending collective redundancy protections to individuals working at sea.

Theme B: Pay and benefits

Currently national minimum wage is not devolved (there is a longer-term commitment to seek the devolution of the powers to set NMW in New Deal New Decade), so the Department has provided funding to Advice NI to support a full-time living wage franchise, to encourage uptake of the real living wage. The franchise and Advice NI will provide accreditation and support for local employers across the north of Ireland for the first time.

The Department has also said: ‘Another important component of pay and benefits is being able to “switch off” from work. The development of modern working practices, particularly advances in technology and the upsurge of working from home, has meant that the lines between work time and home life can become blurred’.

Fair and transparent allocation of tips, gratuities and service charges

Payments for services that are within the control or under significant influence of employers must be distributed to workers in a fair and transparent manner, excluding any deductions required by law.

Employers will be obliged to maintain records of service-related payments received and how they are distributed. Workers will have the right to request access to these records.

Additionally, the Department intends to introduce a statutory code of practice, which will outline the principles of fairness and transparency in relation to service payments.

Payslips

The current system means that workers who are not employees do not have the statutory right to an itemised payslip. The new intended legislation will give all workers the right to an itemised pay statement. This will have to contain information on the number of paid hours worked by an employee or worker, in situations where pay varies by time worked.

Calculating holiday pay (the holiday pay reference period)

The Department intends to bring Northern Ireland average holiday pay calculation in line with Great Britain, who in 2020 extended the reference period from 12 weeks to 52 weeks.

Working time regulations: record keeping requirements

Although there is no intention for the Department to change the Working Time Regulations (Northern Ireland) 2016, they are looking to further support compliance within working time regulations. Working with the Labour Regulations Agency they will produce guidance for employers and workers clearly articulating the requirements on employers for record keeping.

Working time regulations: right to disconnect

The Department will look to work with social partners to agree and produce a statutory code of practice for the right to disconnect, and how it should be applied.

Theme C: Voice and representation

This area is to reform the way in which trade unions operate:

• to make them more accessible for workers, and increase membership
• reduce barriers on matters such as trade union recognition
• improve employee voice and workplace representation.

Workplace access

Trade unions will be entitled to request access to workplaces, including digital platforms. While the intention is that employers should not unreasonably deny such access to trade union representatives, it will not be granted automatically. Access will be subject to certain conditions, such as visits taking place at reasonable times and in accordance with on-site health, safety, and security protocols.

Trade union workplace recognition

Currently trade unions can request to be recognised by an employer if they have at least 21 workers as members before the request is made. To support employees to get access to a trade union, this number will be reduced to 10 workers.

Collective bargaining: introduction of collective sectoral bargaining

With the aim of improving workplace relations and enhancing the terms and conditions of all workers – while also taking into account the potential economic impact – the Department will engage with key stakeholders and the Labour Relations Agency. This collaboration will explore how a collective bargaining framework could be implemented more broadly than is currently the case.

The Department will work alongside these stakeholders and the Labour Relations Agency to actively promote collective bargaining. The overarching goal is to progress towards meeting the EU Adequate Minimum Wage Directive’s target of achieving a collective bargaining coverage rate of 80%.

Industrial action: balloting and notice

To strike a balance between the needs of businesses and the rights of workers to take industrial action, the notice period for such action will remain at seven days. This aligns with the approach taken in the Republic of Ireland.

However, the Department will explore reasonable adjustments to the administration of the balloting process, with the aim of reducing bureaucratic burdens for both trade unions and employers.

Furthermore, the Department intends to introduce legislation that will allow trade unions to use electronic balloting systems as an alternative to traditional postal ballots.

Protection for trade union representatives

With a view to improving workplace relations, the Department will produce a code of practice, in consultation with local stakeholders and the Labour Relations Agency, on facilitating workplace relationships. This will include a minimum set of expected behaviours as to how all parties should engage with each other.

Protections for employees taking part in industrial action

Currently it is automatically unfair to dismiss employees for taking part in official industrial action: in the 12-week period from the day the industrial action starts; or after the 12-week period if an industrial tribunal or arbitrator has decreed that the employer has not taken reasonable steps to resolve the workplace-related dispute.

Legislation will be introduced to amend the current 12-week protection period by removing any fixed time limit on the protections available to employees participating in official industrial action.

The existing position regarding unfair dismissal during unofficial industrial action will be maintained. This means that an employee dismissed while taking part in unofficial industrial action will generally not be entitled to claim unfair dismissal.

Facilitating productive workplace relationships

During the consultation process, the Department identified that workplace relations is an area that needed development. In the interests of supporting respectful and effective workplaces, the Department will produce, in consultation with local stakeholders and the Labour Relations Agency, a code of practice on facilitating workplace relationships.

Information and consultation – definitions and thresholds

The Information and Consultation of Employees Regulations (Northern Ireland) 2005 (ICE Regs) give employees in larger businesses rights to be informed, on a regular basis, about the business’s economic situation, employment prospects and decisions likely to lead to changes in work organisation or contractual relations (e.g. redundancies or business transfers).

For a valid request there needs to be a minimum of 10% of employees, subject to a minimum of 15 employees. The Department intends to introduce legislation to amend the definition of an “undertaking” so that the right to request an Information and Consultation of Employees (ICE) agreement will extend to smaller establishments and satellite offices within larger organisations.

In addition, the Department will lower the threshold of employees required to make a valid request for an ICE agreement from 10% to 2%. Furthermore, the minimum number of employees needed to request a formal ICE agreement will be reduced from 15 to 10.

Transfer of undertakings (protection of employment) regulations (TUPE)

The Department has reviewed the consultation responses and, given the complexities involved, has concluded that further engagement on this matter is necessary before any decisions regarding legislative changes are made.

In view of the significant reforms proposed in the good jobs consultation and the forthcoming Employment Rights Bill, the Department does not intend to make any amendments to the TUPE regulations at this time.

The Department is also aware of further consultation planned in Britain concerning their TUPE regulations and will continue to monitor any proposed changes closely. Engagement with stakeholders on this issue will remain ongoing.

Public interest disclosure (whistleblowing)

Workers who are aware of, or suspect, wrongdoing in their workplace but feel unable to report it to their employer may instead approach a ‘prescribed person’ – an independent and external body. However, the Department for the Economy currently lacks information regarding the procedures these bodies follow when handling disclosures, as well as the nature of the issues being raised.

To better assess whether prescribed persons are fulfilling their responsibilities and to gather data on disclosure trends, the Department will require them to produce annual reports.

Certain office holders, such as Members of Parliament and the Assembly, who do not possess regulatory powers to investigate, will be exempt from this requirement.

Theme D: Work-life balance

Flexible working

By removing certain restrictions, the Department will make it easier for employees to request flexible working arrangements. The right to request flexible working will apply from the first day of employment, making it a day-one entitlement.

Employees will be allowed to submit two statutory flexible working requests within a 12-month period. A second request may be made once the first has been fully determined or withdrawn. Employees will no longer be required to explain the potential impact of their flexible working request.

For employers, the statutory grounds for refusing a flexible working request will remain unchanged. However, they will be expected to demonstrate that they have acted reasonably in reaching their decision.

Carer’s leave

The Department will introduce carer’s leave on the same terms that operates in Britain. The Department will establish the legislative foundation for paid carer’s leave. Given the potentially significant legislative, administrative, and financial implications, careful consideration by the Executive will be required before such leave can be introduced.

To support these discussions, the Department has commissioned independent research to assess the potential costs and benefits of implementing paid carer’s leave.

In addition, the Department will lobby Westminster to introduce a statutory entitlement to paid carer’s leave, as this would help address the administrative and affordability challenges currently faced.

Neonatal care leave and pay

The new statutory right to neonatal care leave and pay will be introduced mirroring the leave and pay available in the rest of Britain, which includes leave being a day-one right. Additionally, to the British rules, parents will also be required to give reasonable notice and may need to provide evidence of entitlement to their employer. The Department will work with the Labour Relations Agency to develop guidance on evidence of entitlement as required.

Protection from redundancy for pregnant employees and those taking family leave

The Department will strengthen protections for pregnant employees, as well as for those who have recently returned to work following maternity leave, adoption leave, or at least six weeks of shared parental leave.

Employees will be safeguarded from redundancy from the moment they notify their employer of their pregnancy.

The period of redundancy protection will be extended to 18 months from the date the child is born, stillborn, expected to be born, or placed for adoption. This 18-month period will include any relevant leave taken, such as maternity, adoption, or qualifying shared parental leave.

Individuals who take shared parental leave will also be protected from redundancy, provided they have taken a minimum of six weeks of such leave.

Additionally, protections against dismissal will be enhanced for this group of employees, aligning with the rights being introduced in Britain under the Make Work Pay agenda.

Paternity leave

The Department is following Britain to enhance paternity leave, extending the timeframe to be 52 weeks following birth or adoption, and also allowing the leave to be taken in two separate blocks. They will reduce the notice period to 28 days for each period of leave from 15 weeks and this leave will be a day-one right for employees. There will also be legislation to allow for the increase of the duration of leave in the future.