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Benefits of an absence and sickness policy
In this guide:
- Manage absence and sickness
- Benefits of an absence and sickness policy
- Absence and sickness policies: what to include
- Manage workplace absence and sickness
- Measure and monitor absence and sickness
- Employee absence as a capability issue
- Employee absence as a conduct issue
- Employee absence due to conflict at work
- Employee absence due to bad weather
- Managing absence and sickness: five things you should know
- Managing sickness absence - MindWise (video)
Benefits of an absence and sickness policy
Productivity, morale, and staff retention can be improved with clear workplace policies on absence and sickness.
Having an absence and sickness policy can bring clear business benefits including:
- lower insurance costs
- higher rates of staff retention and motivation
- improved productivity, profitability and morale
You may also find that the reputation of your business is improved and that this, in turn, aids employee recruitment.
Management benefits of having an absence and sickness policy
From a management point of view, having an absence and sickness policy can help you to:
- prevent small problems from developing into larger ones
- measure and monitor employee absence - see measure and monitor absence and sickness
- identify and tackle underlying problems, such as workload demands, poor working conditions, work-life balance issues, conflict at work, or lack of adequate training/career development
Monitoring reasons for unexpected absences is just one of the ways of managing staff health and wellbeing and how you can control staff turnover.
You may find that monitoring reasons for absences makes it easier for you to identify and deal with different types of absences appropriately.
See employee absence as a capability issue and employee absence as a conduct issue.
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Absence and sickness policies: what to include
An overview of what to include in workplace absence and sickness policies.
You should develop your absence and sickness policy/procedures in consultation with line managers and workplace representatives.
What should my absence and sickness policy include?
An absence and sickness policy could include the following:
- When time off might or must be permitted, eg jury service leave and time off for emergencies involving dependants. See allowing time off work.
- How the worker should notify you if they are ill, going to be late for work, or absent for other unexpected reasons, eg because a dependant has had an accident or fallen ill. It might be helpful to clarify the circumstances when dependants leave would typically be applicable, such as where the reason for absence relates to an emergency situation or unexpected disruption. See parental leave and time off for dependants.
- When they should submit a medical statement, known as a fit note, from their healthcare professional or self-certify their illness and the implications of failure to provide appropriate certification. Note that under statutory sick pay rules, self-certification is only required from the fourth day, and a medical statement from the eighth day, of an absence. See manage workplace absence and sickness.
- Details of any methods used to measure absence eg Bradford Factor.
- An indication of what is deemed unacceptable levels of absence and trigger points for taking action to review.
- Statutory - and any contractual - sick pay arrangements. This should also be covered in each employee's written statement of employment particulars.
- The circumstances when absences will be dealt with as a capability issue and the circumstances when absences will be dealt with as a conduct issue.
- Possible procedures for using the employer's own doctor/medical adviser or the procedure for seeking an employee's consent to obtain a medical report from their GP/medical practitioner.
- If applicable, the need to attend a return-to-work interview
- Consequences of not complying with the policy, eg when disciplinary measures will be taken.
- Identifies who is responsible for keeping attendance records.
- Reference to any other relevant policies, eg alcohol/drug misuse, health and safety, discipline and grievance, annual leave, maternity/adoption/paternity/parental leave. See staff documents and employment policies.
You may also want to include the following points:
- If you have good reason to believe an employee is abusing the system, you may begin disciplinary action against them.
- While you will treat those who fall ill sympathetically, excessive sickness can result in dismissal. For information on dealing with employee illness fairly, see employee absence as a capability issue.
Supporting staff with long-term sickness
There are other options you may want to consider, including:
- offering a counselling service (or arranging a referral to specialist assistance)
- setting up rehabilitation programmes for long-term sickness
- a referral to an occupational health service that can provide useful information regarding staff on long-term sickness absence and support their return to work
- appointing an absence case manager
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Manage workplace absence and sickness
An overview of the basic principles of managing absence and sickness effectively.
There are a number of steps you should take to manage unexpected workplace absence and sickness effectively:
- Produce clear written procedures for reporting absence. See absence and sickness policies: what to include.
- Accurately record and monitor absence. See measure and monitor absence and sickness.
- Train managers on how to handle absence.
- Set targets for absence levels.
- Conduct return-to-work interviews after absences, interviewing sensitively to find out if there are underlying causes.
- Provide special equipment if appropriate, eg specialist chairs or chair aids for employees with back problems. Find out about the help available to employers from the Health and Work Support Branch.
- Develop other initiatives to encourage good attendance, eg improvement of working conditions, the introduction of flexible working, provision of counselling and healthcare facilities.
Statement of fitness for work or the fit note
A statement of fitness for work, also known as a fit note is a medical statement that healthcare professionals issue to patients whose health condition affects their ability to work.
Fit note change from 1 July 2022
Since 1 July 2022, other healthcare professionals in addition to doctors are able to sign a fit note. This includes registered nurses, physiotherapists, occupational therapists, and pharmacists. See fit note changes come into effect from 1 July 2022.
A healthcare professional may only issue a fit note after seven calendar days of sickness absence. For sickness absences of seven calendar days or fewer, employees can self-certify.
A statement of fitness for work allows a healthcare professional to advise either that the patient is unfit for work or that they may be fit for work if appropriate support is available eg a phased return to work, altered hours, amended duties, or workplace adaptations.
In the latter case, the healthcare professional may also comment on the functional effects of the patient's health condition and, if appropriate, what changes you, as the patient's employer, could make - in agreement with the employee - to help them get back to work as part of their recovery.
While you don't have to act on the healthcare professional's advice, the statement may help you make simple and practical workplace adjustments to help your staff return to work and reduce unnecessary sickness absences.
Regardless of what a statement says, you must still make reasonable adjustments for disabled employees under the disability provisions in the Disability Discrimination Act 1995.
The Chartered Institute of Personnel and Development (CIPD) has a number of guides, factsheets and Q&As on absence management.
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Measure and monitor absence and sickness
How to measure and record absence and sickness in your workplace.
Setting up procedures for measuring absence and sickness in the workplace allows you to identify:
- how much working time has been lost
- where absence occurs the most, eg among particular types of worker or department
- how often individual workers are absent
- whether there is a pattern of absence, eg where a worker regularly calls in sick on a Friday
- sickness absence reasons
It will also show whether the absence is:
- due to short-term sickness and certificated
- due to short-term sickness and uncertificated
- due to long-term sickness
- not sickness-related and authorised
- not sickness-related, but unauthorised
With this information, you should be able to take the appropriate action to improve workplace absence and sickness levels.
Reasons for employee absence
Reasons for unauthorised absence can be personal, eg due to domestic problems, or work-related, eg due to verbal abuse from customers or heavy workloads and, in turn, increased levels of stress.
Consider improving such conditions by:
- examining job design
- using temporary staff during busy periods
- developing policies and procedures to tackle anti-social behaviour against public-facing staff
- offering flexible working patterns, training and promotion opportunities, staff incentives, etc
- offering employees training on managing work-related stress
- offering managers training on managing stress in the workplace
Return-to-work interviews
Return-to-work interviews can be an effective way of collecting absence data. Carried out sensitively, they can help establish:
- if there is a hidden reason for a worker's absence, eg workplace bullying or domestic problems
- f they are fit to return to work
- whether there is any underlying medical condition
- the likelihood of any recurrence of the problem/illness
- if there is an absence problem
- whether any action is required and allow the employer to explain the consequences of any further absences
- if medical referral is necessary
- whether a disability exists
Keeping sickness and absence records
Prior to 6 April 2014 under regulation 7 (13) of Schedule 4 to the Social Security (Contributions) Regulations 2001, an employer had to keep wage records for all employees.
Regulation 13 of the SSP General Regulations 1982, as amended by Regulations 3 of the Social Security Contributions, Statutory Maternity Pay and Statutory Sick Pay (Miscellaneous Amendments) Regulations 1996, required an employer to keep sick absence records for each employee for each year.
With effect from 6 April 2014 regulation 13 was revoked and employers are no longer required to keep records of sickness absence.
Regulation 13A is still in force and an employer may be required to produce records to show statutory sick pay has been paid to their employees. See statutory sick pay forms and record-keeping.
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Employee absence as a capability issue
How an employee's illness can affect their ability to perform their job.
An employee may become incapable of doing their job to the required standard because they are genuinely affected by either of the following:
- long-term ill health related to an underlying medical condition and therefore they don't attend work for a long period of time
- frequent bouts of short-term sickness related to an underlying medical condition and they are therefore unable to attend work regularly
Addressing absence as a capability issue
In either of these circumstances, you should treat any absence as a capability issue and:
- deal with the situation sensitively
- investigate, measure, and monitor the employee's absence record
- consult them regularly to find out about their health and discuss ways of enabling them to remain in the workplace, or if on long-term sickness absence the likelihood of a return to work
- set time limits on assessing the situation and tell the employee
- let them know if their job is at risk, and why
- obtain medical reports - although you'll need their permission
- consider adjustments to their job to allow them to return to work and/or do their job more easily
- consider offering any other vacancy you may have which has duties that the employee may be fit to perform
To avoid an unfair dismissal claim, only dismiss as a last resort. Make sure you have followed fair and proper procedures, including statutory dismissal and disciplinary procedures. See dismissing employees.
Keep in mind the following:
- Check if the illness relates to a disability - if so, you may need to make reasonable adjustments so that the employee can carry out their job. For the definition of disability, see how to prevent discrimination and value diversity.
- Discount any periods of absence related to a pregnancy-related illness when taking action over someone's absence record. For the rights of pregnant employees, see pregnancy at work.
- An eligible employee may be entitled to statutory sick pay for up to 28 weeks - as well as any contractual sick pay. See pay: employer obligations.
Absence related to drugs and alcohol
Treat employees addicted to drugs or alcohol similarly to employees with any other serious illness. However, if an employee won't accept they have a problem or seek help, the issue may become one of unacceptable conduct.
Where the issue is purely one of conduct, ie the employee is not addicted to alcohol or drugs but their drug/alcohol consumption is leading to regular absence/lateness, you should consider subjecting them to your disciplinary procedure.
See workplace policies on smoking, drugs, and alcohol, and employee absence as a conduct issue.
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Employee absence as a conduct issue
How to manage an absence problem as a conduct issue where you may need to take disciplinary action.
Persistent short term absence due to illness, where there is no specific medical cause, should be dealt with as a conduct issue and you may wish to take disciplinary action.
Be aware though that sickness, domestic problems or travel difficulties leading to absence or lateness may not necessarily amount to misconduct. Absences relating to an underlying medical condition should be dealt with as a capability issue. Additionally, if the sickness is pregnancy related, you must not take disciplinary action. See employee absence as a capability issue.
Investigations before taking disciplinary action
Prior to taking disciplinary action, you should:
- review the employee's attendance record
- meet with the employee to discuss and review their overall attendance record
If there is no reasonable explanation for the absence you may decide to take disciplinary action.
Prior to taking disciplinary action, you could:
- caution employees that it is a requirement to comply with your absence and sickness policy/procedures and this would include ensuring they phone in at or by a given time each day
- ensure line managers follow up on any unexplained absence
Where employees are finding it difficult to manage home and work responsibilities, consider introducing flexible working arrangements.
Note that eligible employees have the right to request flexible working.
You must consider such requests seriously - see flexible working: the law and best practice.
Taking disciplinary action
The employee should be given an opportunity to improve. Usually warnings, both oral and written, are sufficient.
If the situation does not improve, you may have to consider dismissal, but only as a last resort and after following proper and fair procedures, including statutory dismissal and disciplinary procedures. See disciplinary procedures, hearings, and appeals.
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Employee absence due to conflict at work
How to manage staff who are absent because of disputes or other conflicts in the workplace.
An employee may be absent because of a conflict at work. This absence could either be in the form of sick leave or unauthorised and unexplained. With any type of absence, the employee may telephone you to explain what has caused it, or you may have to call the employee instead.
Resolving conflict at work
If you find out that an employee's absence is being caused by a conflict at work, you need to take steps to resolve it.
You may wish to use mediation as a way of resolving the problem. Mediation is a process whereby an independent third party intervenes in a workplace dispute to assist the parties to reach a satisfactory outcome. Mediation is especially suitable when used at the early stages of a problem at work and can be used in any dispute, but is particularly useful in relationship issues. The Labour Relations Agency (LRA) provides a free mediation service.
However, the employee might just tell you that they are affected by depression or stress. If so, you should try to find out - if it's not immediately clear - the underlying cause to determine whether it's work-related.
With unauthorised absence, the employee may be reluctant to tell you why they are absent, ie they might either avoid giving you an explanation or give you an explanation that you find unconvincing. In either case, you should arrange a return-to-work interview with the employee to find out the underlying cause of their absence.
If the employee continues to take periods of unauthorised absence, you may treat it as a conduct issue and apply your disciplinary procedure (which should as a minimum comply with the statutory dismissal and disciplinary procedures). You may find that, during a disciplinary hearing, the employee raises a grievance relating to a conflict at work that has ultimately led to their absence. If this happens, you should consider suspending the disciplinary process for a short period in order to deal with the grievance. However, if the grievance constitutes the employee's defence to the disciplinary issue, you may find it convenient to deal with both issues concurrently.
See disciplinary procedures, hearings, and appeals and handling grievances.
Return-to-work interviews
Whenever an employee returns to work after a period of sickness absence, you should hold a return-to-work interview with them.
As part of the discussion, you can:
- welcome the employee back
- check they are well enough to be at work
- update them on any news while they were absent
- ask them about the cause of their absence
You may find that they were absent because of a conflict at work. For example:
- they have an ongoing disagreement with a peer or their manager
- they are being bullied or harassed by a colleague, client or customer
- before their absence, you had called them to a meeting on an unrelated disciplinary matter, eg to discuss their performance or conduct
- there is a dispute between groups of workers
- there is a dispute between a group of workers and management over, for example, pay or conditions, which may have already led - or may lead in future - to industrial action
If so, you need to take steps to deal with the conflict. See managing conflict.
If you are already aware that the absence was caused by a conflict at work, you should inform the employee about the steps that you have taken or plan to take to resolve it. They should also have a clear understanding of what may happen if they continue to be absent from work.
Continuing absence during a disciplinary procedure
If you think an employee's continuing absence is itself due to a forthcoming disciplinary hearing and, as a result, they fail to attend it, you should:
- rearrange the date of the meeting
- consider seeking medical advice on an employee's fitness to attend a disciplinary hearing
- warn the employee that, if they fail to attend again without good reason, you could make your decision on the matter in their absence
If the employee repeatedly fails to attend rearranged disciplinary hearings, you need to consider all the facts and come to a reasonable decision on how to proceed.
Considerations may include:
- any rules you have for dealing with failure to attend disciplinary meetings
- the seriousness of the disciplinary issue under consideration
- the employee's disciplinary record (including current warnings), general work record, work experience, position and length of service
- medical opinion on whether the employee is fit to attend the meeting
- how you have dealt with similar cases in the past
- the explanations and reasons for non-attendance given by the employee
However, eventually you will be entitled to reach your disciplinary decision in their absence, whether it's a warning, action short of dismissal such as demotion, or even dismissal itself.
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Employee absence due to bad weather
Flexible working and other issues you may have to tackle during bad weather.
Bad weather - particularly heavy snow - and the resulting transport problems can lead to a large number of employees being absent from or late for work.
To reduce the impact of bad weather, you should plan ahead. For example, think about issues such as alternative working patterns or who can cover at short notice.
It's also a good idea to include a section on bad weather in your absence policy so that you and your staff know what to do when these situations arise.
Remote working
It's worth considering a more flexible approach to matters such as location - you could allow employees to work from home/remotely if, for example, all or most of their work is done using a computer with an internet connection.
Alternatively you could agree with the employee that they start and finish at a later time, or that they take a day's holiday or perhaps any accrued time off in lieu.
In addition, information technology could be useful in enabling a business to run effectively if many employees are absent from work, for example using laptops or smartphones to work remotely. See remote access security best practice.
Pay issues
You do not have to pay an employee if, because of bad weather:
- they are unable to get to work
- they are late for work (unless the travel itself is part of their working time or - in some situations - where you provide the transport)
However, you may have to pay an employee if:
- the right to payment is set out in their employment contract or a collective agreement
- it's become custom and practice for you to do so in these circumstances
Finally, providing you do not discriminate, you might, even without obligation, choose to pay for a short lateness absence, making it clear it is not a precedent. Such a consideration can engender staff goodwill.
Dealing with absence issues fairly
Even if your business is damaged by the effects of absent workers, make sure that any disciplinary action you take is carried out according to proper and fair procedure.
This will help maintain good, fair, and consistent employment relations and help prevent complaints to industrial tribunals. See disciplinary procedures, hearings, and appeals.
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Managing absence and sickness: five things you should know
Top tips to help employers effectively manage unexpected workplace absence.
As an employer, you should ensure you have appropriate systems in place to manage unexpected staff absences. These absences can affect productivity and profits and can even lower morale and motivation.
Top tips to manage workplace sickness and absences
The following top tips will help you to better manage unexpected absences in your business.
1. Understand the reasons for employee absence
It's important to be aware of potential factors contributing to the absence levels in your business. Reasons for absence could be personal or work-related. Some common reasons include unsafe work practices; heavy workloads; family problems; abuse from customers; conflict at work; ill health; drug or alcohol dependency; and bad weather. See how to manage absence and sickness.
2. Put effective policies and procedures in place
You can improve the impact of absences by putting effective policies and procedures in place and applying these fairly and consistently. These should be backed up by agreeable working conditions, good management, and a focus on staff motivation. Having an absence and sickness policy brings clear business benefits including lower insurance costs, higher rates of staff retention, and improved productivity. Having set procedures in place can also help you to prevent small problems from developing into larger ones, measure and monitor absence and identify underlying problems. Read about the benefits of having an absence and sickness policy.
3. Spend time developing your absence and sickness policy
You should develop your absence and sickness policy and procedures in consultation with line managers and workplace representatives. Your policy could include: when time off is permitted; how and when the worker should notify you of absence; when a worker should submit a medical statement or fit note from their healthcare professional; statutory sick pay arrangements; consequences of not complying with the policy; and responsibility for keeping attendance records. Absence and sickness policies: what to include.
4. Prepare for and manage unexpected absences
You should adhere to your absence and sickness policy and procedures when an instance of unexpected absence occurs. There are also a number of steps you should take to prepare for such an event: accurately record and monitor absence; train managers on how to handle absence; provide special equipment if appropriate; and set targets for absence levels. You should also conduct return-to-work interviews after absences, interviewing sensitively to assess if there are any underlying causes. You could also develop other initiatives to encourage good attendance such as the introduction of flexible working or introducing counselling and healthcare packages. Manage workplace absence and sickness.
5. Measure and monitor absence in your business
Monitoring absence in your business allows you to find out how much working time has been lost, where the absence occurs most, how often individual workers are absent, and whether there is a pattern of absence. With this information, you should be able to take the appropriate action to improve the situation. See measure and monitor absence and sickness. Not least, measuring and monitoring absences might reveal annual patterns of stress points which can help you prepare for and manage absences to a degree eg restrict (within contract limits) leave at such times.
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Manage absence and sickness
Managing sickness absence - MindWise (video)
In this video case study, MindWise and the Equality Commission, explain the importance of having a workplace sickness absence policy.
MindWise is a Northern Ireland charity that works to support those at risk of and affected by, severe mental illness and mental health difficulties.
MindWise has a low sickness absence among its staff. Anne Doherty, Deputy Chief Executive, explains how the organisation achieves and maintains this success rate. This includes having the right policies and procedures, alongside creating a culture where there are workplace initiatives, to promote a healthy environment for all staff. The charity specifically encourages WRAP (Wellness Recovery Action Planning) as a method to support positive mental health and wellbeing.
MindWise works closely with the Equality Commission. In this video, Una Wilson from the Equality Commission also highlights the challenges that Northern Ireland businesses face when managing sickness absence and the local support that is available to assist.
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Holding a disciplinary appeal hearing
In this guide:
- Disciplinary procedures, hearings and appeals
- Disciplinary procedures and the employment contract
- Telling staff about disciplinary rules and procedures
- Investigating disciplinary issues
- Informal and formal action for misconduct and poor performance
- Preparing for a formal disciplinary hearing
- Holding a formal disciplinary hearing
- Dealing with grievances raised during disciplinary procedures
- Disciplinary action you can take
- Holding a disciplinary appeal hearing
Disciplinary procedures and the employment contract
How to communicate your disciplinary rules and procedure and whether or not to make them contractual.
You must inform each employee in writing about:
- your disciplinary rules
- your disciplinary and dismissal procedure
- the name of the person that they should appeal to if they are unhappy about a disciplinary or dismissal decision
You can either include this in their written statement of employment or refer in the statement to where they can find the information, eg in a staff handbook.
If you fail to provide this information to an employee and they succeed in an industrial tribunal claim against you, they could be awarded two or four weeks' pay.
The status of disciplinary procedures
Current legislation stipulates that an employer must provide their employee with a written statement of particulars of employment within two months of commencing employment. This statement should also include a note specifying any disciplinary rules applicable to the employee and who they should address any appeals to if they are dissatisfied with a disciplinary/dismissal decision.
This information can be provided in a separate document as long as this is reasonably accessible to the employee. Many employers opt to provide these documents by way of written procedures that are simply appended to the written statement.
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Telling staff about disciplinary rules and procedures
The rules on conduct and misconduct and the procedure to follow if the rules are broken.
You must tell your employees about your rules on acceptable and unacceptable behaviour in the workplace, and the consequences of breaching them.
Setting out disciplinary rules
Your disciplinary rules should cover:
- absence
- timekeeping
- performance
- health and safety
- personal appearance
- discrimination, bullying and harassment
- smoking, and alcohol and drug consumption
- use of company facilities and equipment for personal reasons in work time
- internet/social media usage
Note that sometimes rule breaches on absence may be more appropriately dealt with as a capability matter. The Labour Relations Agency can advise on this. Your rules should make it clear that if an employee doesn't meet the minimum standards of conduct or performance, you may begin disciplinary action against them.
Gross misconduct
The rules should also give examples of what behaviour you will treat as gross misconduct. This is misconduct judged so serious that it will lead to dismissal without notice, such as:
- being drunk or under the influence of drugs at work
- fighting at work
- fraud
- gross negligence or insubordination
- serious breaches of health and safety rules
- theft
- wilful damage to property
- use of the internet or email to access pornographic, obscene or offensive material
- accessing confidential information deliberately when not entitled to
- bringing the organisation into serious disrepute
Make it clear that the list is not exhaustive. What counts as gross misconduct varies depending on the type of business and the role of the employee.
(It would only be in extreme cases that general bullying and harassment would be considered gross misconduct. Allegations of bullying and any allegations of discrimination, victimisation, or harassment would be dealt with as a disciplinary matter with only the most serious issues being considered as gross misconduct for a first offence.)
Disciplinary procedures
Your disciplinary procedure should be set out in writing, follow the principles set out in the Labour Relations Agency (LRA) Code of Practice on Disciplinary and Grievance and, at the very least, comply with the statutory disciplinary and dismissal procedures.
If you unreasonably fail to follow the statutory procedures, or your own enhanced dismissal/disciplinary procedure and the issue ends up at an industrial tribunal or statutory arbitration hearing, any compensation awarded could be increased by between 10% and 50%.
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Investigating disciplinary issues
How to investigate a disciplinary matter before starting the disciplinary procedure.
When faced with a potential disciplinary issue, you should carry out a full investigation before taking any action.
Consider:
- the alleged breach of the discipline policy
- the circumstances and consequences of the breach
- the employee's job, experience, length of service and disciplinary record
- any recent changes to the employee's job
- the evidence of any witnesses (and if relevant, their reliability)
- whether the employee has received appropriate counselling or training
- any mitigating circumstances, eg health or domestic problems, or provocation
You should then review the evidence and decide if:
- a case exists and whether it is serious enough for disciplinary measures
- there is an alternative to disciplinary action, eg an informal chat or redeployment
Suspending an employee while an investigation takes place
For certain serious offences, you may need to suspend an employee while you investigate the issue. They should continue to receive their full pay. You should also consider alternative actions which would be more acceptable to the employee yet serve the same purpose as a suspension eg agreeing to a temporary transfer to other duties or another workstation without loss of pay or the taking of annual holidays to which the employee is entitled. Any action taken should be reviewed to ensure it is not unnecessarily protracted. You should make it clear that any action taken is not considered disciplinary action.
Criminal offences as a disciplinary issue
Don't dismiss someone just because they have been charged with or convicted of a criminal offence, either at work or outside of work. You should consider the seriousness of the offence and whether it affects their suitability to continue working for you.
If it does, follow your normal disciplinary procedure. If it doesn't, decide whether you can keep their job open during their absence.
Base your decision on a reasonable belief following an investigation into the circumstances. If a criminal charge has been made, you will need to consider whether you can proceed with any disciplinary action immediately or whether you should await the outcome of any criminal proceedings. You can seek advice from the LRA on individual circumstances.
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Informal and formal action for misconduct and poor performance
How to manage disciplinary issues informally and when formal action is required for misconduct and poor performance.
If an employee's performance or conduct does not meet your standards, you should try to help them improve. Have an informal discussion with them as soon as you're aware of a problem. Explain what they're doing wrong and agree on actions to be taken.
If the employee's poor conduct or performance continues, you may have to take formal disciplinary action.
Your disciplinary procedure should - at the very least - comply with the statutory dismissal and disciplinary procedures, and meet the good-practice principles set out in the Labour Relations Agency (LRA) Code of Practice on Disciplinary and Grievance Procedures.
Remember that the employee has the right to be accompanied by a work colleague or Trade Union Official (who may be either a full-time official employed by a union or a lay union official who has been reasonably certified in writing by his/her union as having experience of or as having received training in, acting as a worker's companion) at any formal disciplinary meeting.
Formal disciplinary procedure
When taking formal disciplinary action, the employer should comply with the statutory procedures by ensuring that the following steps are taken at all stages of the formal disciplinary process.
Step 1: Statement of grounds for action and invitation to meeting
The employer must provide the employee with a written statement of the alleged misconduct which has led to the consideration of formal disciplinary action or dismissal. The employer should invite the employee to a hearing to discuss the issue.
Step 2: Hearing
Prior to the hearing the employer should supply any information relevant to the allegation allowing the employee sufficient time to consider the detail and prepare their defense. After the meeting, the employer should inform the employee of the decision and offer the right to appeal.
Step 3: Appeal
If the employee wishes to appeal he or she will inform the employer within five working days. The employer will invite the employee to a further hearing to discuss the appeal. The final decision will be communicated to the employee.
Minor misconduct
If the alleged breach falls within the minor misconduct category the employer should follow the formal procedure outlined above and the following action will be taken if the employer is satisfied that an offence has occurred:
Stage 1: Verbal warning
The employee should be given a verbal warning. It will be recorded and retained on file for a period of 6 months.
Stage 2: First written warning
If the same or similar offence is repeated within 6 months the employee should be given a first written warning. It will be recorded and retained on file for a period of 12 months.
Stage 3: Final written warning
If the same or similar offence is repeated within 12 months the employee should be given a final written warning. This will contain a clear notice that a repeat of the offence within 12 months will result in dismissal.
Stage 4: Dismissal
If an employee has been issued with a final written warning then this normally means that any further misconduct within the duration of the warning may result in dismissal.
Major misconduct
If the alleged breach falls within the major misconduct category the employer will follow the formal procedure as outlined above. If the employer is satisfied that an offence has occurred the employee will receive a final written warning which will contain a clear notice that a repeat of the offence within 12 months may result in dismissal.
Gross misconduct
If the alleged breach falls within the gross misconduct category the employer will follow the formal procedure as outlined above. If the employer is satisfied that an offence has occurred the employee will be dismissed summarily, ie without notice and without wages in lieu of notice.
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Preparing for a formal disciplinary hearing
How to organise attendees and evidence to ensure a disciplinary meeting runs smoothly.
Before you hold a disciplinary hearing, you should:
- familiarise yourself with the statutory dismissal and disciplinary procedures, the Labour Relations Agency (LRA) Code of Practice on Disciplinary and Grievance Procedures, and your own enhanced dismissal and disciplinary procedure so that you apply it correctly and act fairly and consistently
- carry out a full investigation, familiarise yourself with the facts established from the investigation including any witness statements and details of any past disciplinary action taken against the employee
- arrange for someone to take notes
You should also ensure the employee has:
- plenty of time before the meeting to prepare their case and consult any representatives
- details of the complaint, the procedure to be followed, and the need for them to attend a disciplinary hearing
- had the opportunity to exercise their right to be accompanied at the hearing by a colleague or trade union representative
- copies of any documents you intend to rely on as evidence at the hearing
If the employee is a trade union representative, it is advisable to discuss the case with a full-time trade union officer or senior trade union representative. You should get the employee's agreement to this before discussing the case.
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Holding a formal disciplinary hearing
How to run a disciplinary hearing, informing the employee of its outcome, and how you should deal with delays.
When holding a formal disciplinary hearing, you should:
- ensure that it's private and won't be interrupted
- introduce everyone and explain why they are there
- explain the reason for the hearing and how it will be conducted
- describe the exact nature of the complaint and go through the evidence
- give the employee a chance to state their case and to respond to any allegations made
- get all the facts and take note of any special circumstances
- summarise what's been discussed and highlight any issues that need to be investigated further
If it becomes clear that the employee has a satisfactory explanation for their conduct or performance, adjourn the hearing, make your decision, and notify the employee that there is a finding of 'no case to answer'.
Informing the employee of your disciplinary decision
Following a disciplinary hearing, you should inform the employee as soon as possible in writing of:
- the disciplinary penalty you plan to impose, if any
- the reasoning behind your decision
- the specific improvement that is required, if any
- how long any warning is going to remain in force
- what will happen if they continue to perform or behave poorly
- their right of appeal and how this should be carried out
Dealing with delays to the disciplinary hearing
If the employee is genuinely unable to attend the disciplinary hearing, offer them a reasonable date and time as an alternative.
You should make the employee aware that decisions may be taken in their absence if they fail to attend rearranged meetings without good reason.
If the employee chooses to be accompanied by a companion and the employee's companion cannot make the rearranged hearing, the employee must propose another date and time which is no more than five working days after the day you originally proposed.
If the employee fails to attend the rearranged hearing without good reason, you can treat this stage of the procedure as complete and make your decision there and then. You must still inform the employee in writing of your decision and that they have the right to appeal.
If you cannot make the rearranged hearing, you must offer the employee a reasonable alternative date and time.
Notify the employee as soon as possible of any delays. If you fail to do so, an industrial tribunal/arbitrator could increase any compensation awarded to the employee.
Dealing with long-term absence
An employee may well become anxious or stressed in the run-up to a disciplinary hearing, which can lead to them being absent with stress-related illness.
If this happens, you can ask the employee's GP or an occupational health specialist for a medical report. You must gain the employee's agreement before doing so.
The report should state whether or not the employee is fit enough to attend a hearing in the near future.
If they are deemed fit enough to attend, you should arrange the hearing with the employee in the normal way.
If they are not fit to attend, you might not be able to complete the disciplinary procedure without unreasonable delay. You can treat the procedure as having been completed and make a decision in the employee's absence. You should still tell the employee that they can supply written representation or other material for their defence if they wish.
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Dealing with grievances raised during disciplinary procedures
What to do if an employee claims the disciplinary action you have taken against them is discriminatory or unfounded.
If the employee raises a grievance during the disciplinary process the employer can deal with the issue as follows:
If the grievance is unrelated to the disciplinary allegations
It would normally be safe to progress with the disciplinary matter and deal with the grievance at a later stage.
If the grievance essentially constitutes the employee's defence to the disciplinary issues
It would be desirable to deal with the two things at the same time. For example a proposed dismissal for poor performance where the grievance alleges this was due to a manager's bullying. No discussion of the one could sensibly be carried out without a rehearsal of the other.
If the grievance seeks to criticise or cast doubt on the integrity of the individual who is to make the disciplinary or dismissal decision
The safest course of action may be to adjourn the disciplinary hearing until the grievance has been resolved or to sidestep the grievance by shifting the making of the proposed disciplinary decision to another manager if the employer's hierarchy gives space to do so.
Read the Labour Relations Agency's advice on handling discipline and grievances at work.
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Disciplinary action you can take
Dismissal and penalties short of dismissal, such as fines and demotion.
After a disciplinary hearing, you could decide to:
- drop the issue completely
- issue a verbal, written - or a final written - warning
- provide counselling or training to help resolve the issue
- apply a disciplinary penalty, such as demotion or dismissal
Take account of factors such as the employee's previous record and any mitigating circumstances in making your decision.
Disciplinary action other than dismissal
If you feel that the employee's misconduct or poor performance was not serious enough to dismiss them, you could:
- transfer them to another job
- demote them
- fine them, eg by not paying a bonus that they might have been eligible for
- suspend them without pay - this is not very common and would mean that you lose the employee's services for a time
To avoid potential claims, you should ensure disciplinary actions are authorised by the employee's contract of employment.
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Holding a disciplinary appeal hearing
When an employee appeals against your decision following a disciplinary hearing.
An employee has the right to appeal against the decision you make after the disciplinary hearing. You must tell them that they have this right when you give them written notice of your decision. Give them a deadline, eg 5 working days, to let you know whether or not they want to appeal.
If the employee does appeal, you must try to hold the appeal hearing without unnecessary delay.
Before you hold an appeal hearing, you should make the same preparations that you made before the earlier disciplinary hearing(s).
Holding an appeal hearing
The principles for holding an appeal hearing are generally the same as for the initial disciplinary hearing.
However, at the appeal hearing, you should also consider:
- the reasoning behind the appeal
- any new evidence since the earlier decision
Ideally the person hearing the appeal should be different and more senior than the person who heard the initial hearing.
However, where the person hearing the appeal also heard the first hearing, they should act impartially and make sure they review the original decision carefully.
After the hearing, write to the employee with your decision and the reason for it as soon as possible. If the decision is final, your letter should make this clear.
Dealing with delays to the appeal hearing
You should deal with delays to the appeal hearing in the same way that you deal with delays to earlier disciplinary hearings.
Let the employee know as soon as possible of any delays to the appeal process. If you don't, an industrial tribunal/arbitrator could increase any compensation it awards to the employee. The Labour Relations Agency Arbitration Scheme explained.
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Whistleblowing: Exceptionally serious failures
In this guide:
- Dismissing employees
- Types of employee dismissal
- Fair dismissal
- Unfair dismissal
- Unfair dismissal: employee eligibility
- Dismissals on capability grounds
- Dismissals relating to industrial action
- Dismissal due to illness
- Dismissals on conduct grounds
- Whistleblowing and dismissal
- Whistleblowing: Qualifying disclosures
- Whistleblowing: Exceptionally serious failures
- Whistleblowing: Right of complaint to an industrial tribunal
Types of employee dismissal
The different types of staff dismissal and unfair dismissal claims.
There are several types of staff dismissal:
- fair dismissal
- unfair dismissal
- constructive dismissal
- wrongful dismissal
Fair and unfair dismissal
A dismissal is fair or unfair depending on your reason or reasons for dismissal and whether you act reasonably during the dismissal process. Industrial tribunals/arbitrators follow previous legal decisions in deciding what is reasonable. What is unfair dismissal and what is fair dismissal?
Constructive dismissal
Constructive dismissal occurs where an employee resigns because you have substantially breached their employment contract, for example:
- cutting wages without agreement
- unlawfully demoting them
- allowing colleagues to subject them to harassment, bullying, victimisation, humiliation or discrimination
- unfairly increasing their workload
- changing the location of their workplace without contractual authority
- making them work in dangerous conditions
The breach of contract can result from either a single serious event or the last in a series of less serious events.
An individual may claim constructive unfair dismissal. A constructive dismissal is not necessarily an unfair one but it's hard for an employer to show that an action in breach of the contract was, in fact, fair.
Wrongful dismissal
Wrongful dismissal is where a contractual term is broken in the dismissal process, for example, dismissing an employee without giving them proper notice.
For further information see the Employers' Handbook Section 18: Disciplinary issues and dismissal (PDF, 95K).
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Fair dismissal
You must have a valid reason for dismissing an employee - understand the reasons that constitute a fair dismissal.
To dismiss an employee fairly, you must first have a fair reason for doing so. Potential reasons for fair dismissal include:
- conduct
- capability
- redundancy
- a statutory requirement which could prevent the employment continuing, such as a driver losing their driving licence
- some other substantial reason - any other potentially fair reasons fall into this category
An example of 'some other substantial reason' would be the dismissal of an employee who was taken on as a temporary replacement for an employee on maternity leave. For such a dismissal to be fair, you must have told the replacement employee at the beginning of their employment that the job was only temporary.
In order for any dismissal to be fair, you must also act reasonably and fairly during the dismissal procedure.
Acting reasonably
There is no statutory definition of 'reasonableness'. Reasonableness will be judged taking into account the employer's size and resources and will also consider whether the employer:
- raised and dealt with the issue promptly and consistently throughout the process
- genuinely believed that the reason for dismissal was a potentially fair one
- had reasonable grounds for that belief
- carried out proper and reasonable investigations where appropriate
- followed statutory dismissal and disciplinary procedures
- informed the employee in writing why they were being considered for dismissal and listened to their views
- allowed the employee to be accompanied at disciplinary/dismissal hearings and appeals
- gave the employee the chance to appeal against the decision to dismiss
Reasonableness may also depend on whether the employee could be expected to understand the consequences of their behaviour.
Dismissal and disciplinary procedures
You must set out your dismissal and disciplinary rules and procedures in writing. Sample dismissal procedures (DOC, 14K).
There is a minimum statutory procedure that must be followed when you decide to dismiss an employee. Failure to follow this procedure may result in a finding of automatic unfair dismissal.
If you fail to follow the statutory procedure, where it applies, and the issue is subsequently heard by a tribunal, any compensation awarded to the employee could be increased by between 10% and 50%.
You should follow the good practice advice set out in the Labour Relations Agency (LRA) Code of Practice on Discipline and Grievance.
Additional advice, including sample procedures, can be found in the LRA guidance on advice on handling discipline and grievances at work.
Though tribunals/arbitrators do not have to take this booklet into account, it provides more detail and guidance which may be helpful.
Summary dismissals
Summary dismissal is the dismissal of an employee without notice or pay in lieu of notice - this occurs when they have committed an act of gross misconduct.
You should investigate the circumstances of the misconduct before dismissing the employee.
However, if you feel that you have no choice but to dismiss an employee, you must still follow statutory procedures.
Staff probationary periods
If you decide to dismiss an employee during their probationary period, you must follow at least the statutory dismissal and disciplinary procedure.
Third-party pressure to dismiss an employee
If a customer or client threatens to withdraw their business unless you dismiss one of your employees, only an industrial tribunal/arbitrator can determine whether or not such a dismissal is fair. Such dismissals are normally categorised as 'some other substantial reason'.
You cannot however take into account pressure exerted by a trade union by the calling or threatening of industrial action.
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Unfair dismissal
Reasons that automatically constitute the unfair dismissal of an employee.
Even if you think you have dismissed an employee fairly, they could decide to bring an unfair dismissal claim because they believe that:
- the reason you gave for the dismissal wasn't the real one
- you dismissed them for an unfair reason - see unfair dismissal
- you acted unreasonably, eg by failing to give the employee plenty of warning in the run-up to taking the decision to dismiss them
How to fairly dismiss an employee fairly
If you think you may have to dismiss an employee, make sure that you:
- Have a fair reason for dismissal.
- Follow - at the very least - the statutory dismissal procedure. If you unreasonably fail to follow the statutory dismissal procedure and the issue is heard at tribunal, any compensation awarded to the employee could be increased by between 10% and 50%.
- Follow any contractual disciplinary/dismissal procedure you may have, as well as the guidance outlined in the Labour Relations Agency (LRA) Code of Practice on Discipline and Grievance Procedures. Your contractual procedure should comply with the code.
See fair dismissal.
Penalties for unfair dismissals
If an employee has been unfairly dismissed, the employer may be ordered to reinstate or reengage the employee. This however is an exceptional outcome.
Invariably, a tribunal or arbitrator will award compensation, made up of a basic award that depends on the employee's age, gross weekly pay, length of service, and a compensatory award.
They can also make an additional award if you fail to follow an order to reinstate or re-engage the employee.
Apart from in health and safety and whistleblowing cases, there is a limit on the amount which can be awarded for unfair dismissal. For the latest limits on awards, see our table of current tribunal and arbitration compensation limits.
The Labour Relations Agency Arbitration Scheme
The Labour Relations Agency (LRA) Arbitration Scheme provides an alternative to having a case heard by a tribunal to resolve an employment-related dispute (for example, claims of unfair dismissal, breach of contract or discrimination, etc).
The scheme is quicker, confidential, non-legalistic, less formal, and more cost-effective than a tribunal hearing.
Under the scheme, an arbitrator's decision is binding as a matter of law and has the same effect as a tribunal.
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Unfair dismissal: employee eligibility
Employer consequences if you dismiss someone unfairly.
Employees can usually only claim unfair dismissal if they have worked for you for at least one year.
There are a number of reasons for dismissal that are automatically unfair. Most of these do not require the employee to have a minimum of one year's service, ie the employee will be able to claim unfair dismissal from day one of employment.
Who cannot complain to a tribunal about unfair dismissal?
The right to complain to a tribunal about unfair dismissal is also not available to:
- Self-employed people.
- Those who are not employees, eg casual workers, independent contractors or freelance agents.
- Members of the armed forces.
- Employees who have reached a settlement with their employer via Labour Relations Agency (LRA) conciliation.
- Individuals working under an illegal contract, eg a barman who is under the age of 18 years old or employees in receipt of untaxed monies.
- Employees covered by a dismissal procedure agreement that has been exempted from the unfair dismissal provisions by legislation. This is a rarely exercised legal provision.
- Employees taking part in unofficial industrial action (unless the dismissal is for certain specified reasons, eg taking family leave or making a protected disclosure). For more information, see the page in this guide on dismissals relating to industrial action.
- The police (although police staff may make unfair dismissal claims where the dismissal relates to health and safety or the making of a protected disclosure).
- Those employed as a master - or as a member of the crew - of a fishing vessel where the individual is paid only by a share in the profits or gross earnings of the vessel.
- Employees who have reached a settlement with their employer via a 'compromise agreement'. This is an agreement reached, with the benefit of a relevant independent advisor who has professional indemnity insurance, in which the employee waives their right to make a complaint in relation to the dispute to which the settlement relates. This means that the agreement must specify the legal basis for the dispute - it cannot state that it covers all the possible employment-related claims.
Exemption from the unfair dismissal provisions
The parties to a dismissal-procedures agreement can apply jointly to the Department for the Economy to substitute provisions of the unfair dismissal legislation. Such substitution may be allowed if all the following points are satisfied:
- every trade union which is a party to the agreement is independent
- the agreement has a procedure to be followed if an employee claims to have been unfairly dismissed
- the procedure is non-discriminatory and available to all relevant employees
- the procedure gives employees a similar level of protection to that provided by the legislation
- the agreement includes provision either for arbitration in every case or allows arbitration in cases where a decision can't be reached or where a decision raises a question of law
- the agreement clearly defines which employees it applies to
Lay-offs and short-time working
You may temporarily lay off an employee or put them on short-time working, eg because of a downturn in work. This does not necessarily amount to a redundancy dismissal. You can only do this if the terms of their contract of employment allow it or by agreement with the employee. See Employers' Handbook Section 23: Lay-off and short time working (PDF, 33K).
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Dismissals on capability grounds
How to dismiss an employee fairly when they are incapable of doing their job properly or commit some form of misconduct.
Sometimes an employee is incapable of doing their job to the required standard. This may be because they don't have the right skills or aptitude for the job.
They may also be capable of doing their job, but unwilling or reluctant to do it properly. In these particular circumstances, you would deal with the issue as one of misconduct and follow your company disciplinary procedures and the statutory dismissal and disciplinary procedures (if they apply). Otherwise capability is a separate dismissal category to misconduct. See dismissals on conduct grounds.
In most cases involving capability, you can help an employee improve by taking informal action, eg by offering training/mentoring or another suitable job (you would only redeploy to another suitable job if this is something that they agree to at this stage).
Capability dismissals: lack of skills/aptitude
To ensure that any resulting capability dismissal is fair when formal action is taken - you should:
- Inform the employee in writing of the performance issues that exist and invite them to a meeting to discuss these issues.
- Following the meeting, give an employee who is found to be performing unsatisfactorily a written note, as a summary and explanation ideally, setting out the performance problems identified at the meeting, the improvement that is required, a reasonable timescale for achieving this improvement, a review date and any identified measures of support you will provide to assist them to meet the required standards.
- Inform your employee that the note represents the first stage of a formal procedure and that failure to improve could lead to a final written warning and, ultimately, dismissal. You should keep a copy of the note and use it as the basis for monitoring and reviewing performance over the specified timescale - see managing staff performance. You should also inform the employee that they may appeal at any stage of the formal process.
- If there is a failure to improve in the timescale outlined, repeat the above procedure and issue a final written warning.
- If again there is a failure to improve within the timescale set out in the final written warning, this may result in dismissal.
- Finally, you should note that some exceptional acts of incapability can merit summary dismissal.
- Throughout the formal process, employees have the right to be accompanied to all meetings and appeal meetings and to appeal to a more senior manager - ideally one not involved in the initial meetings. To read more on the right to be accompanied, read the LRA Code of Practice on Disciplinary and Grievance Procedures.
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Dismissal due to illness
How to handle dismissing an employee due to long-term ill health.
Dismissal due to capability may also include instances where the employer dismisses because the employee is no longer capable of doing the job they were employed to do because of illness.
Occasionally an employee may have to leave your employment because of long-term ill health. Sometimes the employee will simply choose to resign. However, you might eventually have to consider dismissing them.
In order for a dismissal to be potentially fair, you must ensure that you regularly communicate and consult with the employee, take appropriate medical advice, consider the effects of the absence on the business, consider alternatives to dismissal and, if appropriate, take account of any reasonable adjustments as required under disability discrimination legislation. See employ and support people with disabilities.
Finally, before dismissing an employee you must also ensure you comply with the statutory dismissal procedures.
Prior to dismissal due to illness
Before dismissing an employee, you should consider as many ways as possible to help them back to work - dismissal is a last resort and could be unfair if not handled properly. It is also very important that you determine whether or not they are disabled under the Disability Discrimination Act 1995.
You can consider getting a medical report from their GP (with their written permission), or an occupational health assessment. Remember to ask the questions that are relevant to the job, as this will enable you to get the information you need to make an informed decision. The employee has the right to see the GP report before you and may choose not to disclose some information.
If their continued employment is no longer feasible because there are no reasonable adjustments that can be made, it may be fair for you to dismiss them.
During any dismissal procedure, you should treat all employees with sensitivity. You should also act fairly and reasonably. Your dismissal procedure must follow the statutory dismissal requirements.
If you unreasonably fail to follow the statutory dismissal procedures when dismissing and the employee is successful in unfair dismissal proceedings, any compensation awarded by the tribunal or arbitrator could be increased by between 10% and 50%.
If the employee who is subject to the procedure is disabled, you will also have to consider making any possible reasonable adjustments to allow for their needs; you have to address disability discrimination laws, so this is important.
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Dismissals relating to industrial action
How to ensure that you dismiss an employee fairly for reasons relating to industrial action.
It is automatically unfair to dismiss workers for taking part in official industrial action:
- In the 12-week period from the day the industrial action starts.
- That lasts longer than 12 weeks - but only if you haven't taken reasonable steps to resolve the dispute. Only an industrial tribunal/arbitrator can decide whether or not you've taken the necessary steps to resolve the dispute.
Subject to some exceptions (see below), an employee dismissed while taking part in unofficial industrial action can't generally claim unfair dismissal.
For the difference between official and unofficial industrial action, see our guide on industrial disputes.
If you 'lock-out' employees taking industrial action, the days of the lock-out are not included in the calculation of the 12-week protected period. A lock-out is where you prevent employees from getting to their workplace, eg by locking the doors to the premises.
Apart from this - subject to some exceptions (see below) - an industrial tribunal/arbitrator can't hear a complaint of unfair dismissal from an employee dismissed while taking part in official industrial action as long as you have:
- dismissed all those who were taking part in the action on the same date that you dismissed the person complaining of unfair dismissal
- not offered re-engagement to any dismissed employee within three months of the dismissal date without making the person complaining of unfair dismissal a similar offer
Exceptions
The exceptions are that a tribunal/arbitrator can hear a complaint of unfair dismissal from an employee dismissed while taking part in industrial action - either official or unofficial - if the main reason:
- was that the employee took certain specified types of action on health and safety grounds
- related to maternity/paternity/adoption/parental/shared parental/parental bereavement leave, pregnancy or time off for a dependant
- was that the employee exercised their rights under the Working Time Regulations (Northern Ireland) 2016
- related to the right to request flexible working arrangements
- was that the employee had been summoned or took time off work for jury service
- was that the employee took certain specified types of action as an employee representative or as a candidate to become one, or taking part in the election of such a representative
An industrial tribunal/arbitrator can also hear a complaint of unfair dismissal from an employee dismissed while participating in unofficial industrial action if the reason or main reason for the dismissal was that the employee made a protected disclosure.
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Dismissals on conduct grounds
How to dismiss employees involved in incidents of misconduct.
If you find that an employee has been involved in an incident of misconduct, the action you take depends on how serious it is. For example:
- If the misconduct relates to a minor issue, the penalty for a first offence would normally be a verbal warning. This would be followed by a written warning if the offence is repeated within a specified timescale. Further occurrences would result in a final written warning and ultimately dismissal if repeated again.
- If the misconduct relates to a more serious issue, the employer may issue a final written warning for a first offence followed by dismissal for any further repeat of the offence within a specified time scale.
- The Labour Relations Agency (LRA) Code of Practice applies the statutory procedures to the issue of warnings as a matter of good practice.
- If the misconduct is of a very serious nature, the employer may dismiss for a first offence.
- No disciplinary action should be taken until there has been a thorough investigation into the alleged misconduct.
- Details of the alleged misconduct should be set out in writing and given to the employee prior to any hearing taking place.
- The employee must be offered the right to appeal against any decision taken within the formal procedure
- Throughout the formal process, employees have the right to be accompanied to all meetings and appeal meetings and to appeal to a more senior manager - ideally one not involved in the initial meetings
- The LRA Code of Practice on Disciplinary and Grievance Procedures recommends that verbal warnings remain on file for a six-month period and written warnings for a 12-month period.
Discipline and dismissal have a statutory procedure which must be followed and if it is not, where it applies, this may result in a finding of automatic unfair dismissal.
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Whistleblowing and dismissal
Protection from dismissal or detrimental treatment for workers who disclose a suspected relevant failure at work.
Workers who suspect wrongdoing and 'blow the whistle' to disclose these concerns to their employer are protected from dismissal or other negative consequences - as long as certain criteria are met. This law intends to help businesses quickly identify and resolve such problems.
The term 'workers' refers to those who work under:
- a contract of employment, eg employees
- some other contract to perform work personally, eg casual workers
It does not cover the genuinely self-employed.
The whistleblowing law also covers NHS practitioners, such as:
- GPs
- certain dentists
- pharmacists
- opticians
It also covers:
- agency workers
- certain categories of trainee
- those who contract to provide services to the Department of Health
- those who contract to provide services to a business via their own limited company - even if introduced via an employment agency or employment business
- student nurses and student midwives who undertake work experience as part of a course of education or training approved by, or under arrangements with, the Nursing and Midwifery Council (NMC)
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Whistleblowing: Qualifying disclosures
The types of disclosure that are eligible for protection from dismissal.
The types of disclosure that are eligible for protection are known as 'qualifying disclosures'.
These are where the worker reasonably believes that the disclosure is being made in the public interest and at least one 'relevant failure' is currently happening, took place in the past, or is likely to happen in the future.
Relevant failures can be:
- a criminal offence
- a miscarriage of justice
- damage to the environment
- the breach of a legal obligation
- a danger to the health or safety of any individual
- the deliberate covering up of information tending to show any of these matters
The same protection applies even if the qualifying disclosure concerns a relevant failure overseas or where the applicable law is not that of the UK.
Disclosures that can be characterised as being of a personal rather than public interest, will not be protected.
The belief does not need to be correct. The worker only needs to show that they held the belief and that it was a reasonable belief in the circumstances at the time they made the disclosure.
The disclosure is not a qualifying disclosure if:
- by making the disclosure, the worker has committed an offence, eg under the Official Secrets Act 1989
- the information should be protected from disclosure because of legal professional privilege, eg the disclosure has been made by a legal adviser (or their secretary) who has acquired the information in the course of providing legal advice
Qualifying disclosures made internally
A worker is protected if they make a qualifying disclosure to either:
- their employer - either directly or by using a procedure authorised by the employer for that purpose
- to another person who the worker reasonably believes to be solely or mainly responsible for the relevant failure
Ideally, you should have a whistleblowing policy that includes a procedure to follow if a worker wishes to make a qualifying disclosure.
Qualifying disclosures made externally
A worker is protected if they make a qualifying disclosure to an appropriate 'prescribed person'. These are certain statutory bodies - or people within them - who have the authority to receive disclosures relevant to the role of that particular body. Breaches in health and safety law, for example, can be brought to the attention of the Health and Safety Executive for Northern Ireland or the appropriate local council.
Public Interest Disclosure guidance.
For the disclosure to be protected, the worker must:
- reasonably believe the information and any allegation it contains are substantially true and are in the public interest to disclose
- reasonably believe they are making the disclosure to the relevant person or body
A qualifying disclosure is also a protected disclosure if it is made:
- to a government minister or a Northern Ireland Department Permanent Secretary by someone working in a government-appointed organisation - this could be directly or via departmental officials and in the public interest to disclose
- to a legal adviser in the course of obtaining legal advice - there are no further conditions attached
Other circumstances where an external disclosure is protected
A qualifying disclosure continues to be a protected disclosure if the conditions below are met.
Firstly, the worker must:
- not act for personal gain
- reasonably believe the information - and any allegation contained in it - is substantially true
In addition, one or more of the following conditions must be met:
- the worker must have previously disclosed the same information to their employer or to a prescribed person
- the worker reasonably believed they would be subjected to a detriment by their employer if the disclosure was made to the employer or a prescribed person
- in the absence of an appropriate prescribed person, the worker reasonably believed that disclosure to the employer would result in the destruction or concealment of information about the wrongdoing
Finally, it must be reasonable for the worker to make the disclosure. An industrial tribunal/arbitrator will decide whether the worker acted reasonably in all the circumstances, particularly taking into account:
- the seriousness of the relevant failure
- whether the relevant failure is continuing or likely to occur again
- whether the worker followed any internal procedures approved by the employer
- what action has, or might reasonably be expected to have, been taken where a previous disclosure was made to the employer or a prescribed person
- whether the disclosure breaches the employer's duty of confidentiality to others
- the identity of the person to whom the disclosure was made
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Whistleblowing: Exceptionally serious failures
How workers are protected when reporting an exceptionally serious failure in the workplace.
If the relevant failure is exceptionally serious, any qualifying disclosure made externally will be protected if the worker:
- does not act for personal gain
- reasonably believes the information disclosed, and any allegation contained in it, are substantially true
Also, it must be reasonable for the worker to make the disclosure in view of all the circumstances - with particular regard to the identity of the person to whom the disclosure is made.
Only an industrial tribunal/arbitrator can decide whether or not the relevant failure is exceptionally serious. This will be a matter of fact and not simply a matter of the worker reasonably believing it to be exceptionally serious.
Raising a grievance and making protected disclosures
Employees do not necessarily have to raise a grievance in order to make a protected disclosure.
For more information about grievance procedures, see our guide on handling grievances.
There may be good reasons why a worker wishes their identity to remain confidential. The law does not compel an organisation to protect the confidentiality of a whistleblower. However, it is considered best practice to maintain that confidentiality, unless required by law to disclose it.
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Whistleblowing: Right of complaint to an industrial tribunal
If an employee is dismissed for making a protected disclosure, they may bring a claim to an employment tribunal.
An employee may bring a claim for unfair dismissal if they are dismissed for making a protected disclosure. A tribunal/arbitrator will find any such dismissal to be automatically unfair.
An employee or other worker who believes they have been subjected to a detriment for making a protected disclosure can bring a complaint of detrimental treatment.
A worker subjected to a detriment by a co-worker in the course of that co-worker's employment with the employer, on the grounds that the worker made a protected disclosure, may be able to take a case to an Industrial Tribunal against both the co-worker and their employer.
A detriment can be either an act or a deliberate decision not to act by the employer. Whether an employee or other worker has suffered a detriment will be decided by the tribunal/arbitrator.
Examples of detrimental treatment include:
- threats of dismissal
- withholding a pay rise
- discrimination in promotion, transfer, or training opportunities
- failure to confer a benefit on a person who failed to accept an unlawful inducement that would have been conferred on them had they accepted the offer
Workers who are not employees cannot claim unfair dismissal. However, their dismissal could amount to a detriment and therefore they could still bring a detrimental treatment claim.
Remedies
Where a tribunal or arbitrator finds that an employee's complaint of unfair dismissal is justified, they will order either:
- reinstatement/re-employment
- the payment of compensation
Where an employee or other worker complains they have been subjected to a detriment and the tribunal or arbitrator finds the complaint well-founded, they will make a declaration to that effect and may order the payment of compensation.
An industrial tribunal will have the discretion to reduce a compensatory award by up to 25% in the event that it finds the disclosure has not been made in good faith.
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Whistleblowing: Qualifying disclosures
In this guide:
- Dismissing employees
- Types of employee dismissal
- Fair dismissal
- Unfair dismissal
- Unfair dismissal: employee eligibility
- Dismissals on capability grounds
- Dismissals relating to industrial action
- Dismissal due to illness
- Dismissals on conduct grounds
- Whistleblowing and dismissal
- Whistleblowing: Qualifying disclosures
- Whistleblowing: Exceptionally serious failures
- Whistleblowing: Right of complaint to an industrial tribunal
Types of employee dismissal
The different types of staff dismissal and unfair dismissal claims.
There are several types of staff dismissal:
- fair dismissal
- unfair dismissal
- constructive dismissal
- wrongful dismissal
Fair and unfair dismissal
A dismissal is fair or unfair depending on your reason or reasons for dismissal and whether you act reasonably during the dismissal process. Industrial tribunals/arbitrators follow previous legal decisions in deciding what is reasonable. What is unfair dismissal and what is fair dismissal?
Constructive dismissal
Constructive dismissal occurs where an employee resigns because you have substantially breached their employment contract, for example:
- cutting wages without agreement
- unlawfully demoting them
- allowing colleagues to subject them to harassment, bullying, victimisation, humiliation or discrimination
- unfairly increasing their workload
- changing the location of their workplace without contractual authority
- making them work in dangerous conditions
The breach of contract can result from either a single serious event or the last in a series of less serious events.
An individual may claim constructive unfair dismissal. A constructive dismissal is not necessarily an unfair one but it's hard for an employer to show that an action in breach of the contract was, in fact, fair.
Wrongful dismissal
Wrongful dismissal is where a contractual term is broken in the dismissal process, for example, dismissing an employee without giving them proper notice.
For further information see the Employers' Handbook Section 18: Disciplinary issues and dismissal (PDF, 95K).
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Fair dismissal
You must have a valid reason for dismissing an employee - understand the reasons that constitute a fair dismissal.
To dismiss an employee fairly, you must first have a fair reason for doing so. Potential reasons for fair dismissal include:
- conduct
- capability
- redundancy
- a statutory requirement which could prevent the employment continuing, such as a driver losing their driving licence
- some other substantial reason - any other potentially fair reasons fall into this category
An example of 'some other substantial reason' would be the dismissal of an employee who was taken on as a temporary replacement for an employee on maternity leave. For such a dismissal to be fair, you must have told the replacement employee at the beginning of their employment that the job was only temporary.
In order for any dismissal to be fair, you must also act reasonably and fairly during the dismissal procedure.
Acting reasonably
There is no statutory definition of 'reasonableness'. Reasonableness will be judged taking into account the employer's size and resources and will also consider whether the employer:
- raised and dealt with the issue promptly and consistently throughout the process
- genuinely believed that the reason for dismissal was a potentially fair one
- had reasonable grounds for that belief
- carried out proper and reasonable investigations where appropriate
- followed statutory dismissal and disciplinary procedures
- informed the employee in writing why they were being considered for dismissal and listened to their views
- allowed the employee to be accompanied at disciplinary/dismissal hearings and appeals
- gave the employee the chance to appeal against the decision to dismiss
Reasonableness may also depend on whether the employee could be expected to understand the consequences of their behaviour.
Dismissal and disciplinary procedures
You must set out your dismissal and disciplinary rules and procedures in writing. Sample dismissal procedures (DOC, 14K).
There is a minimum statutory procedure that must be followed when you decide to dismiss an employee. Failure to follow this procedure may result in a finding of automatic unfair dismissal.
If you fail to follow the statutory procedure, where it applies, and the issue is subsequently heard by a tribunal, any compensation awarded to the employee could be increased by between 10% and 50%.
You should follow the good practice advice set out in the Labour Relations Agency (LRA) Code of Practice on Discipline and Grievance.
Additional advice, including sample procedures, can be found in the LRA guidance on advice on handling discipline and grievances at work.
Though tribunals/arbitrators do not have to take this booklet into account, it provides more detail and guidance which may be helpful.
Summary dismissals
Summary dismissal is the dismissal of an employee without notice or pay in lieu of notice - this occurs when they have committed an act of gross misconduct.
You should investigate the circumstances of the misconduct before dismissing the employee.
However, if you feel that you have no choice but to dismiss an employee, you must still follow statutory procedures.
Staff probationary periods
If you decide to dismiss an employee during their probationary period, you must follow at least the statutory dismissal and disciplinary procedure.
Third-party pressure to dismiss an employee
If a customer or client threatens to withdraw their business unless you dismiss one of your employees, only an industrial tribunal/arbitrator can determine whether or not such a dismissal is fair. Such dismissals are normally categorised as 'some other substantial reason'.
You cannot however take into account pressure exerted by a trade union by the calling or threatening of industrial action.
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Unfair dismissal
Reasons that automatically constitute the unfair dismissal of an employee.
Even if you think you have dismissed an employee fairly, they could decide to bring an unfair dismissal claim because they believe that:
- the reason you gave for the dismissal wasn't the real one
- you dismissed them for an unfair reason - see unfair dismissal
- you acted unreasonably, eg by failing to give the employee plenty of warning in the run-up to taking the decision to dismiss them
How to fairly dismiss an employee fairly
If you think you may have to dismiss an employee, make sure that you:
- Have a fair reason for dismissal.
- Follow - at the very least - the statutory dismissal procedure. If you unreasonably fail to follow the statutory dismissal procedure and the issue is heard at tribunal, any compensation awarded to the employee could be increased by between 10% and 50%.
- Follow any contractual disciplinary/dismissal procedure you may have, as well as the guidance outlined in the Labour Relations Agency (LRA) Code of Practice on Discipline and Grievance Procedures. Your contractual procedure should comply with the code.
See fair dismissal.
Penalties for unfair dismissals
If an employee has been unfairly dismissed, the employer may be ordered to reinstate or reengage the employee. This however is an exceptional outcome.
Invariably, a tribunal or arbitrator will award compensation, made up of a basic award that depends on the employee's age, gross weekly pay, length of service, and a compensatory award.
They can also make an additional award if you fail to follow an order to reinstate or re-engage the employee.
Apart from in health and safety and whistleblowing cases, there is a limit on the amount which can be awarded for unfair dismissal. For the latest limits on awards, see our table of current tribunal and arbitration compensation limits.
The Labour Relations Agency Arbitration Scheme
The Labour Relations Agency (LRA) Arbitration Scheme provides an alternative to having a case heard by a tribunal to resolve an employment-related dispute (for example, claims of unfair dismissal, breach of contract or discrimination, etc).
The scheme is quicker, confidential, non-legalistic, less formal, and more cost-effective than a tribunal hearing.
Under the scheme, an arbitrator's decision is binding as a matter of law and has the same effect as a tribunal.
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Unfair dismissal: employee eligibility
Employer consequences if you dismiss someone unfairly.
Employees can usually only claim unfair dismissal if they have worked for you for at least one year.
There are a number of reasons for dismissal that are automatically unfair. Most of these do not require the employee to have a minimum of one year's service, ie the employee will be able to claim unfair dismissal from day one of employment.
Who cannot complain to a tribunal about unfair dismissal?
The right to complain to a tribunal about unfair dismissal is also not available to:
- Self-employed people.
- Those who are not employees, eg casual workers, independent contractors or freelance agents.
- Members of the armed forces.
- Employees who have reached a settlement with their employer via Labour Relations Agency (LRA) conciliation.
- Individuals working under an illegal contract, eg a barman who is under the age of 18 years old or employees in receipt of untaxed monies.
- Employees covered by a dismissal procedure agreement that has been exempted from the unfair dismissal provisions by legislation. This is a rarely exercised legal provision.
- Employees taking part in unofficial industrial action (unless the dismissal is for certain specified reasons, eg taking family leave or making a protected disclosure). For more information, see the page in this guide on dismissals relating to industrial action.
- The police (although police staff may make unfair dismissal claims where the dismissal relates to health and safety or the making of a protected disclosure).
- Those employed as a master - or as a member of the crew - of a fishing vessel where the individual is paid only by a share in the profits or gross earnings of the vessel.
- Employees who have reached a settlement with their employer via a 'compromise agreement'. This is an agreement reached, with the benefit of a relevant independent advisor who has professional indemnity insurance, in which the employee waives their right to make a complaint in relation to the dispute to which the settlement relates. This means that the agreement must specify the legal basis for the dispute - it cannot state that it covers all the possible employment-related claims.
Exemption from the unfair dismissal provisions
The parties to a dismissal-procedures agreement can apply jointly to the Department for the Economy to substitute provisions of the unfair dismissal legislation. Such substitution may be allowed if all the following points are satisfied:
- every trade union which is a party to the agreement is independent
- the agreement has a procedure to be followed if an employee claims to have been unfairly dismissed
- the procedure is non-discriminatory and available to all relevant employees
- the procedure gives employees a similar level of protection to that provided by the legislation
- the agreement includes provision either for arbitration in every case or allows arbitration in cases where a decision can't be reached or where a decision raises a question of law
- the agreement clearly defines which employees it applies to
Lay-offs and short-time working
You may temporarily lay off an employee or put them on short-time working, eg because of a downturn in work. This does not necessarily amount to a redundancy dismissal. You can only do this if the terms of their contract of employment allow it or by agreement with the employee. See Employers' Handbook Section 23: Lay-off and short time working (PDF, 33K).
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Dismissals on capability grounds
How to dismiss an employee fairly when they are incapable of doing their job properly or commit some form of misconduct.
Sometimes an employee is incapable of doing their job to the required standard. This may be because they don't have the right skills or aptitude for the job.
They may also be capable of doing their job, but unwilling or reluctant to do it properly. In these particular circumstances, you would deal with the issue as one of misconduct and follow your company disciplinary procedures and the statutory dismissal and disciplinary procedures (if they apply). Otherwise capability is a separate dismissal category to misconduct. See dismissals on conduct grounds.
In most cases involving capability, you can help an employee improve by taking informal action, eg by offering training/mentoring or another suitable job (you would only redeploy to another suitable job if this is something that they agree to at this stage).
Capability dismissals: lack of skills/aptitude
To ensure that any resulting capability dismissal is fair when formal action is taken - you should:
- Inform the employee in writing of the performance issues that exist and invite them to a meeting to discuss these issues.
- Following the meeting, give an employee who is found to be performing unsatisfactorily a written note, as a summary and explanation ideally, setting out the performance problems identified at the meeting, the improvement that is required, a reasonable timescale for achieving this improvement, a review date and any identified measures of support you will provide to assist them to meet the required standards.
- Inform your employee that the note represents the first stage of a formal procedure and that failure to improve could lead to a final written warning and, ultimately, dismissal. You should keep a copy of the note and use it as the basis for monitoring and reviewing performance over the specified timescale - see managing staff performance. You should also inform the employee that they may appeal at any stage of the formal process.
- If there is a failure to improve in the timescale outlined, repeat the above procedure and issue a final written warning.
- If again there is a failure to improve within the timescale set out in the final written warning, this may result in dismissal.
- Finally, you should note that some exceptional acts of incapability can merit summary dismissal.
- Throughout the formal process, employees have the right to be accompanied to all meetings and appeal meetings and to appeal to a more senior manager - ideally one not involved in the initial meetings. To read more on the right to be accompanied, read the LRA Code of Practice on Disciplinary and Grievance Procedures.
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Dismissal due to illness
How to handle dismissing an employee due to long-term ill health.
Dismissal due to capability may also include instances where the employer dismisses because the employee is no longer capable of doing the job they were employed to do because of illness.
Occasionally an employee may have to leave your employment because of long-term ill health. Sometimes the employee will simply choose to resign. However, you might eventually have to consider dismissing them.
In order for a dismissal to be potentially fair, you must ensure that you regularly communicate and consult with the employee, take appropriate medical advice, consider the effects of the absence on the business, consider alternatives to dismissal and, if appropriate, take account of any reasonable adjustments as required under disability discrimination legislation. See employ and support people with disabilities.
Finally, before dismissing an employee you must also ensure you comply with the statutory dismissal procedures.
Prior to dismissal due to illness
Before dismissing an employee, you should consider as many ways as possible to help them back to work - dismissal is a last resort and could be unfair if not handled properly. It is also very important that you determine whether or not they are disabled under the Disability Discrimination Act 1995.
You can consider getting a medical report from their GP (with their written permission), or an occupational health assessment. Remember to ask the questions that are relevant to the job, as this will enable you to get the information you need to make an informed decision. The employee has the right to see the GP report before you and may choose not to disclose some information.
If their continued employment is no longer feasible because there are no reasonable adjustments that can be made, it may be fair for you to dismiss them.
During any dismissal procedure, you should treat all employees with sensitivity. You should also act fairly and reasonably. Your dismissal procedure must follow the statutory dismissal requirements.
If you unreasonably fail to follow the statutory dismissal procedures when dismissing and the employee is successful in unfair dismissal proceedings, any compensation awarded by the tribunal or arbitrator could be increased by between 10% and 50%.
If the employee who is subject to the procedure is disabled, you will also have to consider making any possible reasonable adjustments to allow for their needs; you have to address disability discrimination laws, so this is important.
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Dismissals relating to industrial action
How to ensure that you dismiss an employee fairly for reasons relating to industrial action.
It is automatically unfair to dismiss workers for taking part in official industrial action:
- In the 12-week period from the day the industrial action starts.
- That lasts longer than 12 weeks - but only if you haven't taken reasonable steps to resolve the dispute. Only an industrial tribunal/arbitrator can decide whether or not you've taken the necessary steps to resolve the dispute.
Subject to some exceptions (see below), an employee dismissed while taking part in unofficial industrial action can't generally claim unfair dismissal.
For the difference between official and unofficial industrial action, see our guide on industrial disputes.
If you 'lock-out' employees taking industrial action, the days of the lock-out are not included in the calculation of the 12-week protected period. A lock-out is where you prevent employees from getting to their workplace, eg by locking the doors to the premises.
Apart from this - subject to some exceptions (see below) - an industrial tribunal/arbitrator can't hear a complaint of unfair dismissal from an employee dismissed while taking part in official industrial action as long as you have:
- dismissed all those who were taking part in the action on the same date that you dismissed the person complaining of unfair dismissal
- not offered re-engagement to any dismissed employee within three months of the dismissal date without making the person complaining of unfair dismissal a similar offer
Exceptions
The exceptions are that a tribunal/arbitrator can hear a complaint of unfair dismissal from an employee dismissed while taking part in industrial action - either official or unofficial - if the main reason:
- was that the employee took certain specified types of action on health and safety grounds
- related to maternity/paternity/adoption/parental/shared parental/parental bereavement leave, pregnancy or time off for a dependant
- was that the employee exercised their rights under the Working Time Regulations (Northern Ireland) 2016
- related to the right to request flexible working arrangements
- was that the employee had been summoned or took time off work for jury service
- was that the employee took certain specified types of action as an employee representative or as a candidate to become one, or taking part in the election of such a representative
An industrial tribunal/arbitrator can also hear a complaint of unfair dismissal from an employee dismissed while participating in unofficial industrial action if the reason or main reason for the dismissal was that the employee made a protected disclosure.
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Dismissals on conduct grounds
How to dismiss employees involved in incidents of misconduct.
If you find that an employee has been involved in an incident of misconduct, the action you take depends on how serious it is. For example:
- If the misconduct relates to a minor issue, the penalty for a first offence would normally be a verbal warning. This would be followed by a written warning if the offence is repeated within a specified timescale. Further occurrences would result in a final written warning and ultimately dismissal if repeated again.
- If the misconduct relates to a more serious issue, the employer may issue a final written warning for a first offence followed by dismissal for any further repeat of the offence within a specified time scale.
- The Labour Relations Agency (LRA) Code of Practice applies the statutory procedures to the issue of warnings as a matter of good practice.
- If the misconduct is of a very serious nature, the employer may dismiss for a first offence.
- No disciplinary action should be taken until there has been a thorough investigation into the alleged misconduct.
- Details of the alleged misconduct should be set out in writing and given to the employee prior to any hearing taking place.
- The employee must be offered the right to appeal against any decision taken within the formal procedure
- Throughout the formal process, employees have the right to be accompanied to all meetings and appeal meetings and to appeal to a more senior manager - ideally one not involved in the initial meetings
- The LRA Code of Practice on Disciplinary and Grievance Procedures recommends that verbal warnings remain on file for a six-month period and written warnings for a 12-month period.
Discipline and dismissal have a statutory procedure which must be followed and if it is not, where it applies, this may result in a finding of automatic unfair dismissal.
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Whistleblowing and dismissal
Protection from dismissal or detrimental treatment for workers who disclose a suspected relevant failure at work.
Workers who suspect wrongdoing and 'blow the whistle' to disclose these concerns to their employer are protected from dismissal or other negative consequences - as long as certain criteria are met. This law intends to help businesses quickly identify and resolve such problems.
The term 'workers' refers to those who work under:
- a contract of employment, eg employees
- some other contract to perform work personally, eg casual workers
It does not cover the genuinely self-employed.
The whistleblowing law also covers NHS practitioners, such as:
- GPs
- certain dentists
- pharmacists
- opticians
It also covers:
- agency workers
- certain categories of trainee
- those who contract to provide services to the Department of Health
- those who contract to provide services to a business via their own limited company - even if introduced via an employment agency or employment business
- student nurses and student midwives who undertake work experience as part of a course of education or training approved by, or under arrangements with, the Nursing and Midwifery Council (NMC)
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Whistleblowing: Qualifying disclosures
The types of disclosure that are eligible for protection from dismissal.
The types of disclosure that are eligible for protection are known as 'qualifying disclosures'.
These are where the worker reasonably believes that the disclosure is being made in the public interest and at least one 'relevant failure' is currently happening, took place in the past, or is likely to happen in the future.
Relevant failures can be:
- a criminal offence
- a miscarriage of justice
- damage to the environment
- the breach of a legal obligation
- a danger to the health or safety of any individual
- the deliberate covering up of information tending to show any of these matters
The same protection applies even if the qualifying disclosure concerns a relevant failure overseas or where the applicable law is not that of the UK.
Disclosures that can be characterised as being of a personal rather than public interest, will not be protected.
The belief does not need to be correct. The worker only needs to show that they held the belief and that it was a reasonable belief in the circumstances at the time they made the disclosure.
The disclosure is not a qualifying disclosure if:
- by making the disclosure, the worker has committed an offence, eg under the Official Secrets Act 1989
- the information should be protected from disclosure because of legal professional privilege, eg the disclosure has been made by a legal adviser (or their secretary) who has acquired the information in the course of providing legal advice
Qualifying disclosures made internally
A worker is protected if they make a qualifying disclosure to either:
- their employer - either directly or by using a procedure authorised by the employer for that purpose
- to another person who the worker reasonably believes to be solely or mainly responsible for the relevant failure
Ideally, you should have a whistleblowing policy that includes a procedure to follow if a worker wishes to make a qualifying disclosure.
Qualifying disclosures made externally
A worker is protected if they make a qualifying disclosure to an appropriate 'prescribed person'. These are certain statutory bodies - or people within them - who have the authority to receive disclosures relevant to the role of that particular body. Breaches in health and safety law, for example, can be brought to the attention of the Health and Safety Executive for Northern Ireland or the appropriate local council.
Public Interest Disclosure guidance.
For the disclosure to be protected, the worker must:
- reasonably believe the information and any allegation it contains are substantially true and are in the public interest to disclose
- reasonably believe they are making the disclosure to the relevant person or body
A qualifying disclosure is also a protected disclosure if it is made:
- to a government minister or a Northern Ireland Department Permanent Secretary by someone working in a government-appointed organisation - this could be directly or via departmental officials and in the public interest to disclose
- to a legal adviser in the course of obtaining legal advice - there are no further conditions attached
Other circumstances where an external disclosure is protected
A qualifying disclosure continues to be a protected disclosure if the conditions below are met.
Firstly, the worker must:
- not act for personal gain
- reasonably believe the information - and any allegation contained in it - is substantially true
In addition, one or more of the following conditions must be met:
- the worker must have previously disclosed the same information to their employer or to a prescribed person
- the worker reasonably believed they would be subjected to a detriment by their employer if the disclosure was made to the employer or a prescribed person
- in the absence of an appropriate prescribed person, the worker reasonably believed that disclosure to the employer would result in the destruction or concealment of information about the wrongdoing
Finally, it must be reasonable for the worker to make the disclosure. An industrial tribunal/arbitrator will decide whether the worker acted reasonably in all the circumstances, particularly taking into account:
- the seriousness of the relevant failure
- whether the relevant failure is continuing or likely to occur again
- whether the worker followed any internal procedures approved by the employer
- what action has, or might reasonably be expected to have, been taken where a previous disclosure was made to the employer or a prescribed person
- whether the disclosure breaches the employer's duty of confidentiality to others
- the identity of the person to whom the disclosure was made
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Whistleblowing: Exceptionally serious failures
How workers are protected when reporting an exceptionally serious failure in the workplace.
If the relevant failure is exceptionally serious, any qualifying disclosure made externally will be protected if the worker:
- does not act for personal gain
- reasonably believes the information disclosed, and any allegation contained in it, are substantially true
Also, it must be reasonable for the worker to make the disclosure in view of all the circumstances - with particular regard to the identity of the person to whom the disclosure is made.
Only an industrial tribunal/arbitrator can decide whether or not the relevant failure is exceptionally serious. This will be a matter of fact and not simply a matter of the worker reasonably believing it to be exceptionally serious.
Raising a grievance and making protected disclosures
Employees do not necessarily have to raise a grievance in order to make a protected disclosure.
For more information about grievance procedures, see our guide on handling grievances.
There may be good reasons why a worker wishes their identity to remain confidential. The law does not compel an organisation to protect the confidentiality of a whistleblower. However, it is considered best practice to maintain that confidentiality, unless required by law to disclose it.
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Whistleblowing: Right of complaint to an industrial tribunal
If an employee is dismissed for making a protected disclosure, they may bring a claim to an employment tribunal.
An employee may bring a claim for unfair dismissal if they are dismissed for making a protected disclosure. A tribunal/arbitrator will find any such dismissal to be automatically unfair.
An employee or other worker who believes they have been subjected to a detriment for making a protected disclosure can bring a complaint of detrimental treatment.
A worker subjected to a detriment by a co-worker in the course of that co-worker's employment with the employer, on the grounds that the worker made a protected disclosure, may be able to take a case to an Industrial Tribunal against both the co-worker and their employer.
A detriment can be either an act or a deliberate decision not to act by the employer. Whether an employee or other worker has suffered a detriment will be decided by the tribunal/arbitrator.
Examples of detrimental treatment include:
- threats of dismissal
- withholding a pay rise
- discrimination in promotion, transfer, or training opportunities
- failure to confer a benefit on a person who failed to accept an unlawful inducement that would have been conferred on them had they accepted the offer
Workers who are not employees cannot claim unfair dismissal. However, their dismissal could amount to a detriment and therefore they could still bring a detrimental treatment claim.
Remedies
Where a tribunal or arbitrator finds that an employee's complaint of unfair dismissal is justified, they will order either:
- reinstatement/re-employment
- the payment of compensation
Where an employee or other worker complains they have been subjected to a detriment and the tribunal or arbitrator finds the complaint well-founded, they will make a declaration to that effect and may order the payment of compensation.
An industrial tribunal will have the discretion to reduce a compensatory award by up to 25% in the event that it finds the disclosure has not been made in good faith.
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Working hours in a week
Working hours in a week
Understand the limit of working hours in an average week.
Unless the worker has an opt-out agreement, or an exemption applies, workers aged 18 years old or over cannot be forced to work for more than 48 hours a week on average. The average is calculated by adding all the working time over the reference period. Read more on exemptions for workers who choose their hours.
You must keep records of your workers' hours to show you comply with the Working Time Regulations. You must retain these records for two years from the date on which they were made.
Calculating average working hours
Workers' hours are usually calculated as an average over a reference period of 17 weeks. In this, you should make sure to include:
- work-related training
- travel as part of a worker's duties
- working lunches
Working time does not include travelling between home and work (if you have a fixed place of work), lunch breaks, tea breaks, evening classes, or day-release courses unrelated to work.
Under certain circumstances, the reference period may be extended to 26 weeks. Through a workforce or collective agreement, your workers can also agree to a longer period over which to average their working hours - up to 52 weeks.
Opting out of the 48-hour working limit
By signing a written agreement, most workers can agree to work longer than the 48-hour limit. They can cancel this opt-out agreement whenever they want as long as they give their employer at least seven days' notice in writing or a longer notice period (up to three months) if one has been agreed upon between the employer and the worker.
Under the Road Transport (Working Time) Regulations (Northern Ireland) 2005, mobile workers in the road transport industry cannot opt out of the weekly working time limits. There are similar restrictions concerning crews on vessels and aircraft. Read more on exemptions for workers who choose their hours.
Young workers and working hours
Special rules apply to working hours for young people under 18 years old and these differ according to their age. For further information, see employing children and young people.
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Rest breaks and rest periods when working
The breaks workers are entitled to take during working hours and between working days, depending on their employment status.
Your workers are entitled to regular rest breaks when working. Workers aged 18 years old or over should be offered a minimum 20-minute uninterrupted break for every shift lasting more than six hours. This can be unpaid unless the employment contract provides for the rest break to be paid.
You can decide when your workers take their rest breaks, but breaks must not be at the beginning or end of a shift. Employers must make sure that workers can take their rest breaks. You must also allow your workers any rest breaks they need due to any health condition or disability.
Working Time Regulations (Northern Ireland) 2016.
Rest periods between working days
Your workers are entitled to regular rest periods between working days, in addition to any holiday entitlement. See know how much holiday to give your staff.
Workers aged 18 years old and over should have a minimum of 11 hours rest between each working day, and shouldn't be forced to work more than six days in every seven, or 12 days in every 14.
Exceptions for rest periods
Exceptions can be made for:
- exceptionally busy periods, based on objective grounds eg Christmas for retail businesses may be a valid reason
- emergencies
- people working away from home
In these cases, rest periods can be compensated for and taken later. However, compensatory rest should be given immediately after the work period where possible.
The Working Time Regulations (Northern Ireland) 2026 give all workers a right to 90 hours’ rest in a week. This is the sum of their entitlement to daily and weekly rest periods (6 x 11 hours daily rest and 1 x 24 hours weekly rest). The exceptions allow workers to take rest in a different pattern than that set out in the regulations. The principle is that everyone gets their entitlement of 90 hours of rest in a week on average, although some rest may come slightly later than normal.
When organising rest periods you need also to consider the maximum average working week which is normally 48 hours.
Employers must make sure that workers can take their rest.
Young workers and breaks
Workers aged 16 and 17 years old are entitled to at least 30 minutes' breaks, uninterrupted if possible if they work more than four and a half hours. This can be unpaid unless the employment contract provides for the break to be paid. If they also work for another employer, the time worked in total on any day must be considered when calculating entitlement to breaks.
Only in exceptional circumstances can young workers miss their breaks - and then they should receive compensatory rest within three weeks.
Young workers are entitled to have a minimum of 12 hours of consecutive rest between working days, they must also have two days off every week, normally two consecutive days, and this cannot be averaged over a two-week period. Only in exceptional circumstances can these rules be changed.
Employers must make sure that workers can take their rest.
Read more on employing children and young people.
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Exemptions on hours and rest for workers who choose their hours
Exemptions to the rules about working hours, rest breaks, and rest periods for workers who choose their hours.
Certain workers who choose their hours are exempt from the rules for:
- the maximum average hours a worker can work each week
- rest breaks
- rest periods
A worker falls into this category if they can decide when and how long they work.
They may have an element of their working time measured or pre-determined, but otherwise, they decide how long they work. A test, set out in the regulations, states that a worker falls into this category if 'on account of the specific characteristics of the activity in which the worker is engaged, the duration of the worker’s working time is not measured or predetermined, or can be determined by the worker.'
An employer needs to consider whether a worker passes this test. Workers such as senior managers, who can decide when to do their work and how long they work, are likely to pass the test. Those without this freedom to choose are not.
This exception would not apply to workers who are:
- paid hourly
- claiming paid overtime
- working under close supervision
- implicitly required to work
Nobody can be forced to work more than an average of 48 hours a week against their will and this exception does not remove this protection.
Check if special exemptions apply to your business
There are exceptions to the rules about working hours, rest breaks, and rest periods if your workers:
- work a long way from where they live
- have to travel to different places for work
There are also exceptions to cover:
- security or surveillance work to protect property or individuals
- jobs that require round-the-clock staffing, for example in hospitals, residential institutions, and prisons
- some employees working in rail transport
- exceptionally busy periods, based on objective grounds, eg Christmas for retail businesses
- emergencies
In all these cases:
- you should average workers' hours over 26 weeks, rather than 17 weeks, to find their average working week
- your workers are entitled to accumulate their rest periods and take them at a later date - called compensatory rest
Your workers may be covered by other rules if your business is in one of the following sectors:
- air, road, or sea transport
- inland waterways and lakes
- sea fishing
Mobile workers
There are also special rules for mobile workers under the Road Transport (Working Time) Regulations (Northern Ireland) 2005.
Mobile workers include:
- drivers - including employed drivers, own-account drivers, and agency drivers
- members of the vehicle crew, eg a second driver on a coach
- anyone else who is part of the travelling staff, eg a bus conductor, a drayman, a trainee or apprentice, or a security guard aboard a vehicle carrying high-value goods
Workers who only occasionally carry out activities are not covered by these rules. These 'occasional mobile workers' will need to follow the Working Time Regulations (Northern Ireland) 2016 instead.
Mobile workers must not exceed:
- an average of 48 hours per week
- 60 hours in any single week
- ten hours in any 24-hour period, if working at night
Young workers
If you are employing young people, you should remember that there are no exemptions in these industries from the regulations for workers aged under 18 years old.
Read more on employing children and young people.
Night workers
A night worker normally works between 11pm and 6am and works at least three hours at night. Night workers should not work for more than an average of eight hours in each 24-hour period. A night worker cannot opt out of the night work limit, the night work can be calculated over the 17-week reference period but can be longer in some circumstances. Young workers should not normally work at night, although certain exceptions allow for this.
Where a night worker’s work involves special hazards or heavy physical or mental strain, there is an absolute limit of 8 hours on the worker’s working time each day - this is not an average.
Night workers must be offered a free health assessment before they start working nights and regularly after that. Workers do not have to take the opportunity to have a health assessment but it must be offered by the employer.
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Finding out why an employee wants to resign
In this guide:
- When an employee resigns
- Finding out why an employee wants to resign
- Checklist: what to do when an employee resigns
- Resignations: conducting exit interviews
- Resignations in the heat of the moment
- Resignations where the employee may claim constructive dismissal
- Resignations connected with a business transfer
Finding out why an employee wants to resign
How to deal with an employee who has handed in their resignation and the requirements around notice periods.
If an employee tells you that they are resigning or intend to resign, the first thing you need to do is find out why.
If the resignation is unexpected, find out why they want to resign. Is there anything you can do to make them change their mind?
Sometimes employees resign because they fall out with someone, eg their line manager. For advice on handling such situations, see resignations in the heat of the moment.
The resignation may be due to family commitments that mean the employee is unable to continue working the same hours for you. Are there changes you can make to working arrangements to accommodate this? See flexible working: the law and best practice.
If the employee is resigning to work for one of your competitors, consider whether it would be worth improving their remuneration/benefits package, working environment, or looking into their promotion prospects.
Notice periods
It is also important that you refer to the employment contract, written statement, or any other agreement you have with the employee to check what period of notice they are required to give.
If there is nothing on notice periods in any written agreement, the statutory notice period will apply, which, for employees with at least one month's service, is a minimum of one week. For more information, see how to issue the correct periods of notice.
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Checklist: what to do when an employee resigns
Useful checklist to help employers manage the resignation process.
If you accept an employee's resignation, there are several things you need to do to make their departure as smooth as possible. Make sure you:
- Get written confirmation of the resignation and the date of resignation. This will help you avoid disputes over the exact date of the resignation and the start of any notice period.
- Decide whether you wish the employee to work out their full notice period. You may find it more appropriate to pay the employee in lieu of all or part of the notice period if your contract provides for it or the employee agrees. However, if you do so, be sure that you are covered in respect of having another employee who can immediately take on the job.
- Confirm the employee's notice period, usually part of their contract of employment. If it is not, statutory notice will apply. See how to issue the correct periods of notice.
- Agree with the employee the terms of an announcement to other staff concerning their departure, if appropriate.
- Organise a handover period. This allows for a smooth handover to existing staff or the employee's replacement of key tasks and responsibilities.
- Arrange an exit interview - see resignations: conducting exit interviews.
- Retrieve security passes and all other property of your business, eg tools, uniforms, computers and company cars.
- Organise their final payment including all money owing, eg pay in lieu of working a notice period, money for unused holidays, overtime and bonus payments. See calculate final pay when a worker leaves.
- Part on good terms. The person leaving may become a client or may be able to refer business to you. Equally, a disgruntled ex-employee can damage the reputation of your business if they leave on poor terms, eg having identified you as their previous employer and then writing about their experiences as your employee on a social networking website or blog. This may be the case where the employee has details on their profile which identifies them as having worked for you. Read Labour Relations Agency advice on social media and the employment relationship.
- Organise a farewell gift or party, if appropriate. Acknowledgement of good service appreciated is valuable for maintaining staff morale and the promotion of a positive organisational culture.
- Make a point of saying goodbye on the actual day the person leaves and thank them again for all their hard work.
- Be careful about references - see when workers leave your employment.
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Resignations: conducting exit interviews
Investigate the reasons staff may have for leaving your business so you can address them and reduce staff turnover.
When employees leave, it is a good idea to arrange an exit interview. You can then use their response to determine whether there are any underlying issues to be addressed.
However, getting employees to reveal the real reason they're leaving can be difficult.
For example, if they say that they have been offered more money by another employer, this doesn't necessarily explain why they started looking for a new job in the first place. It may be that the employee didn't get on with their manager or a team colleague, or that they think they were unfairly overlooked for promotion.
If, during the interview, the employee starts making accusations against a colleague, don't act too hastily. You must ensure there is a fair investigation.
Questions for exit interviews
Some useful questions you could ask include:
- What have you enjoyed the most/least about working for the business/the role?
- What sorts of problems have you found?
- How well did you understand your role? (this would only be relevant to shorter-term staff)
- How effective is the communication/consultation?
- How easy was it to get on with your boss/colleagues?
- To what extent do you feel your work was valued?
- To what extent were your skills and talents used effectively?
- To what extent did you feel your role was secure?
- How satisfied were you with money, terms and conditions, facilities, and equipment?
- How does your current role compare to your new job?
- When did you begin looking for another job?
The employee's answers may be influenced by their need for a reference.
Ideally, someone other than the leaver's manager should try to find out why they're leaving. They may have difficulty telling their manager about problems with their job or department.
You should also look out for reasons that might lead to employees claiming constructive dismissal or discrimination. These wrongs could be corrected before the employee leaves but beware not to suggest any reasons or say anything that could later be used against you. See dismissing employees and how to prevent discrimination and value diversity.
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Resignations in the heat of the moment
How to find out whether or not an employee means to resign following an argument.
Sometimes an employee may say that they are resigning after an argument with their manager or another colleague. In such situations, they might not really have meant to resign.
If this is the case, it is dangerous to act as though the contract has ended because the employee could later claim unfair or constructive dismissal. See dismissing employees.
Managing the situation
If an employee seems to have resigned or has walked out after an argument:
- Don't immediately assume they have resigned.
- Give the employee a 'cooling-off' period.
- Take action to find out whether they really meant to resign.
- If you can't contact them, wait a reasonable time before confirming that their resignation has been accepted.
- Investigate further if you receive additional information relating to the situation, eg that they may have been bullied by a colleague/their manager. See bullying and harassment.
You should also be careful not to say things in the heat of the moment that could be misinterpreted as a dismissal.
It is a good idea to train managers in handling conflict. This can help resolve any workplace problems straight away, rather than allowing them to escalate to the point where formal procedures need to be applied. See managing conflict.
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Resignations where the employee may claim constructive dismissal
Resignations when an employee believes you have breached a fundamental term of their employment contract.
An employee may be entitled to resign if you fundamentally breach a term of their employment contract. This is known as constructive dismissal.
Breaches of contract that may give rise to unfair constructive dismissal claims might include anything that makes it impossible or intolerable for the employee to continue doing the job.
Examples of breaches of contract
Some examples of breaches of the employment contract include:
- cutting an employee's wages or salary or other contractual benefits without their agreement
- transferring an employee to a different job or location in the absence of any stated or implied contractual right to do so
- failing to provide a safe place of work
- breach of your obligation of mutual trust and confidence, a term that is implied in every employment contract
For this reason, you should always seek the employee's prior written agreement when you propose to change their employment contract. For more details, see how to change an employee's terms of employment.
Best practice for disciplinary and grievance procedures
If you don't get the employee's agreement, they could raise a grievance with you. When dealing with such a grievance, you should follow a fair and reasonable procedure. Ideally, your procedure should follow the good practice principles set out in the Labour Relations Agency (LRA) code of practice on disciplinary and grievance procedures.
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Resignations connected with a business transfer
Situations where an employee may and may not be able to claim constructive dismissal following a TUPE transfer.
Under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), if a business - or a part of a business - is transferred to another business, in most cases the employees of the old employer will automatically transfer to the new employer on their existing terms and conditions.
However, an employee can't be transferred to a new employer against their will and may object to the transfer before it takes place.
In this case, if they refuse to have their contract transferred to the new employer, the employee is regarded as having resigned with effect from the transfer date. As a result, there is generally:
- no dismissal
- no redundancy and therefore no right to statutory redundancy pay
- no obligation for the new employer to take them on
However, if the transfer results in a significant and unfavourable change to an employee's working conditions - eg their new place of work is in a different more inconvenient location from their old one or there are substantial changes to their role/duties - they could resign and claim unfair constructive dismissal. However, it will ultimately be a matter for the Industrial Tribunal to determine in light of the circumstances of each case.
For more information on business transfers, see responsibilities to employees if you buy or sell a business.
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Avoiding disputes with your workforce
In this guide:
- Industrial disputes
- Avoiding disputes with your workforce
- Dealing with industrial disputes
- Statutory conditions for immunity when organising industrial action
- Lawful industrial action
- Legal issues during industrial action
- Legal issues following industrial action
- Conducting negotiations to resolve disputes
- The legal consequences of failing to gain statutory immunity
- Conducting industrial action ballots
Avoiding disputes with your workforce
How open communication can help create a conflict-free working environment and prevent disputes from arising.
Good relations between you and your staff are key to creating a productive working environment. You should, therefore, seek to encourage a workplace culture that prevents conflicts from arising.
If you fail to do so, collective grievances could arise, which could, in turn, lead to workers making tribunal claims or calling for industrial action. See staff motivation.
Informing and consulting your workforce and their representatives
It is good practice to develop channels for informing and consulting your workforce and/or their representatives on employment matters and business developments. Indeed, in some cases, you are legally obliged to inform and consult them, eg about collective redundancy situations. See engaging with staff.
Depending on the size of the business, you could set up:
- voluntary recognition with a trade union for collective bargaining purposes
- regular consultations with a recognised trade union - an effective working relationship with union officials can pick up problems before they escalate
- a staff forum or joint working group to pass on information to, collect ideas from, and consult with workers
- an employee consultative body to discuss major issues as they arise
- team and group meetings and feedback sessions
Many employers, especially those which recognise trade unions, have written procedures in place to discuss collective grievances with representatives and other significant issues affecting all or part of the workforce. Procedures are important as they can help you to structure and address problems at an early stage.
If you already have such procedures, you should ensure you follow them effectively and consistently.
If you don't have such procedures, you could consider putting some together in consultation with workers and/or their representatives.
See managing conflict.
The role of Labour Relations Agency (LRA) in preventing disputes
The LRA is an independent statutory body whose role is to improve working life through better employment relations.
The LRA not only helps to resolve a dispute once it arises but also helps employers and workers (or their representatives) work together to prevent disputes from arising in the first place.
The LRA's Good Practice Facilitation and Advisory services are dedicated to preventing workplace disputes where a problem has arisen but has not yet developed into a serious dispute. It will facilitate and offer services such as - assisted bargaining, collaborative working, and joint problem-solving parties, with a view to helping to prevent a dispute by facilitating sustainable solutions that are acceptable to all parties. See LRA dispute resolution services.
The LRA also delivers training and runs briefings, seminars, webinars, and workshops aimed at helping organisations adopt or develop better employment relations practices. LRA good practice seminars.
Employment document toolkit
The LRA has a free online employment document toolkit, once employers are registered they can unlock our free core employment guides to help them build documents, policies, and procedures for their own organisation. Find out about the LRA's free employment document toolkit.
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Dealing with industrial disputes
Ways to resolve disputes with groups of workers through mediation, conciliation, and arbitration.
If a dispute arises, you should meet with representatives of your workers to resolve the problem as soon as possible. Where you have agreed on procedures to meet and discuss such matters with a recognised trade union or other representatives, these procedures should be followed.
The initial concerns of the meeting should be to:
- define the actual cause of the dispute
- clarify who speaks for each side
- explore what options are available to resolve the dispute
In many cases, this meeting, or negotiations that follow it, will resolve the dispute. However, if negotiations become deadlocked, it may be necessary to call in outside help, possibly from the Labour Relations Agency (LRA). Its services are free.
LRA collective conciliation
Collective conciliation is a voluntary process where the LRA conciliators attempt to help employers and employees (normally via trade unions) discuss their differences and reach mutually acceptable settlements of their collective disputes. Outcomes are not imposed or judgements made on the rights and wrongs of the matter in dispute.
The main issues referred for collective conciliation include annual pay reviews; other terms and conditions eg shift hours, bonuses, changes in working practices, redundancy selection; and trade union recognition. Collective conciliation is normally only appropriate when the parties have exhausted their own internal procedures, or they agree it's required.
LRA collective conciliation explained.
LRA mediation service
The mediation service focuses on restoring productive working relationships between individuals and/or groups where those have broken down. Mediation is delivered by the LRA in-house accredited workplace mediators. Mediation is especially suitable when the aim is to maintain the employment relationship. It is often most effective if used in the early stages of a dispute.
LRA arbitration service
The LRA offers the following arbitration services for industrial disputes:
- Industrial arbitrations - these are arranged by the LRA in accordance with its statutory powers under Article 84 of the Industrial Relations (Northern Ireland) Order 1992. In accepting such arbitrations the Agency must be satisfied that any negotiating procedures have been exhausted or are unlikely to resolve the issue and that the dispute cannot be settled by conciliation. This service is provided to employers and unions and, in exceptional circumstances, to individual employees.
- Procedural arbitrations - these are where national or sectoral negotiating procedures provide for arbitration as the final stage in the procedures.
Industrial arbitration is also voluntary but the parties accept in advance to be bound by the arbitrator's resolution, made within agreed terms of reference for the arbitrator. The decision, however, is not legally binding (unlike the LRA Arbitration Scheme, which is legally binding).
The decision to go to arbitration may be ad-hoc or may be an agreed stage in the parties' dispute resolution procedure.
LRA Arbitration and Independent Appeals.
Failure to resolve a collective workplace dispute
If you fail to resolve a dispute with a group of workers and/or their representatives, they may consider taking industrial action.
However, in order for such action to be lawful, it must meet a number of conditions. See lawful industrial action.
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Statutory conditions for immunity when organising industrial action
The statutory conditions for immunity when organising industrial action.
A union or individual must meet certain statutory conditions when organising industrial action.
1. The need for there to be a trade dispute
A person or trade union who calls for, threatens to call for, or otherwise organises industrial action, has immunity from civil action for inducing a breach of contract or interfering with a contract's performance only if acting in contemplation or furtherance of a 'trade dispute'.
For there to be a trade dispute:
- there must be a dispute between workers and their own employer
- the dispute must be wholly or mainly about specified employment-related matters such as:
(a) terms and conditions of employment, or the physical conditions in which any workers are required to work
(b) engagement or non-engagement, or termination or suspension of employment or the duties of employment, of one or more workers
(c) allocation of work or the duties of employment as between workers or groups of workers
(d) matters of discipline
(e) the membership or non-membership of a trade union on the part of a worker
(f) facilities for officials of trade unions
(g) machinery for negotiation or consultation, and other procedures, relating to any of the foregoing matters, including the recognition by employers or employers' associations of the right of a trade union to represent workers in any such negotiation or consultation or in the carrying out of such procedures
The relevant definition does not cover disputes:
- between workers and an employer other than their own employer
- not wholly or mainly about specified employment-related matters like pay and conditions
- between groups of workers or between trade unions, ie where no employer is involved in the dispute
- between a trade union and an employer, where none of that employer's workforce is in dispute with that employer
- relating to matters occurring overseas - except where workers taking action in the UK in support of the dispute are likely to be affected by its outcome
2. The need to hold an industrial action ballot
If a trade union decides to call on its members to take - or continue to take - industrial action, it will have no immunity unless it first holds a properly conducted secret ballot.
See conducting industrial action ballots.
3. The need to provide a notice of official industrial action to the employer
The union organising the industrial action must ensure that the employer receives written notice from the union which:
- Reaches the employer after the union has taken steps to notify the employer of the result of the industrial action ballot, but no less than seven days before the day - or the first of the days - specified in the notice.
- Specifies whether the union intends the industrial action to be 'continuous' or 'discontinuous'. The notice must also give the date on which any of the affected employees will be called on to begin the action (if continuous) or the dates on which any of them will be called on to take part (if discontinuous). Industrial action is 'discontinuous' if it involves industrial action other than on all the days when it might be taken by those concerned. An indefinite strike would, therefore, be continuous. However, an overtime ban might be continuous or discontinuous, depending on whether the ban applied to overtime working on all the days on which overtime would otherwise be worked or to overtime working on only some of those days.
- Provides a list of the categories and workplaces of the employees who are going to take part in the industrial action (the 'affected employees'), figures on the numbers of affected employees in each category, figures on the numbers of affected employees at each workplace and the total numbers of affected employees. The union must also explain how it worked out the figures it provides.
- Is given by any officer, official, or committee of the union which is inducing - and is therefore responsible for - the industrial action.
Note that the lists and figures mentioned above do not need to be provided in full where all of the affected workers pay their union subscriptions by deduction from pay at source, ie through the so-called 'check off' system.
In such circumstances, the notice must contain either:
- those same lists, figures, and explanations as set out above
- information that will allow the employer readily to work out the total number of workers concerned, the categories of workers to which they belong, the number of workers concerned in each of those categories, the workplaces at which the workers concerned work, and the number of them at each of these workplaces
Where only some of the affected workers pay their union subscriptions by the check-off, the union's notice may include both types of information, ie the lists, figures, and explanations should be provided for those who do not pay their subscriptions through the check-off, while information relating to check-off payments may suffice for those who do.
The lists and figures or information supplied should be as accurate as is reasonably practicable in the light of the information in the union's possession at the time when it complied with this requirement of the law.
4. The action is not 'secondary action'
It is unlawful for a union or others to call for, threaten to call for, or otherwise organise secondary industrial action.
Secondary action - which is sometimes referred to as 'sympathy' or 'solidarity' action - means industrial action by workers whose employer is not a party to the trade dispute to which the action relates.
For these purposes:
- where more than one employer is in dispute with its workers, the dispute between each employer and its workers is treated as a separate dispute
- industrial action which is 'primary' action - ie in contemplation or furtherance of a trade dispute between workers and their own employer - is not regarded as 'secondary' action simply because it has some effect on another dispute between workers and a different employer
- the calls on workers to breach, or interfere with the performance of contracts will not be regarded as calls to take secondary action if made in the course of attendance for the purpose of peaceful picketing as the law allows
Note that secondary action can be taken not only by those working under contracts of employment - eg employees - but also by someone working under any contract where they personally do work or perform services for another, eg an agency worker or freelancer. Therefore, such workers can also be at risk of taking unlawful secondary action.
5. The action is not to promote closed-shop practices or against non-union firms
It is unlawful for a union or others to call for, threaten to call for, or otherwise organise industrial action to establish or maintain any sort of union closed-shop practice.
This means that statutory immunity is therefore not available where the reason, or one of the reasons, for the industrial action is either:
- that an employer employs, has employed, or might employ a person who is not a member of a trade union
- to pressurise an employer into discriminating against a person on the grounds of non-membership of a trade union
'Trade union' here can mean any trade union, a particular trade union, or one of a number of particular trade unions.
An employer is discriminating against a person who is not a union member if its conduct in relation to its workers is:
- more favourable to those workers who are members
- different for union members and non-members
In addition, there is no immunity for a relevant act - such as calling for, threatening to call for, or otherwise organising industrial action - which is either:
- designed to exert pressure on an employer to persuade it to impose union-labour-only or recognition requirements on contractors
- taken by the workers of one employer and interferes with the supply (whether or not under a contract) of goods or services by a second employer where the reason, or one of the reasons, for the action, is that the supplier of the goods or services does not recognise, negotiate or consult with trade unions or trade union officials
6. The action is not in support of an employee dismissed for taking part in unofficial industrial action
A union or other person has no immunity if they call for, threaten to call for, or organise industrial action where both:
- the reason, or one of the reasons, for that action is the fact or belief that an employer has dismissed any employee
- the employee has no right to complain of unfair dismissal because they were dismissed while taking part in 'unofficial' industrial action
For these purposes, an 'employer' in relation to an employee includes, in the case where the employment has ceased, the employer they used to work for.
An 'employee' for these purposes who was a member of a union (other than for purposes unconnected with their employment) when they began to take the industrial action and/or at the time they were dismissed will be regarded as having been dismissed while taking 'unofficial' industrial action if, at the time of their dismissal, the act of calling for, threatening to call for or otherwise organising the industrial action, was not the act of the union.
This was because either:
- it was done by a person for whose acts the union was not responsible in law
- although done by a person for whose acts the union was responsible in law, their act has been 'effectively repudiated' by the union's executive committee, president, or general secretary
However, where the relevant act has been so 'repudiated', the employee is not regarded as taking 'unofficial' industrial action until a full working day has passed since the day the repudiation took place.
A 'working day' for these purposes means any day other than a Saturday, Sunday, Christmas Day, Good Friday, or a bank holiday as defined under the [1971 c. 80.] Banking and Financial Dealings Act 1971.
An employee who was not a union member when they began to take the industrial action in the course of which they were dismissed, and/or when they were actually dismissed, will not be regarded as having been dismissed while taking 'unofficial' action unless, at the time of dismissal, there were others also taking the action who were members of a union that had not authorised or endorsed the action.
7. The action doesn't involve unlawful picketing
For picketing to be lawful and therefore maintain the statutory immunity of those organising the industrial action, certain conditions must be met.
See legal issues during industrial action.
Failure to gain statutory immunity
Where a union or individual fails to meet any or all of the conditions set out above, any resulting industrial action will not be covered by statutory immunity.
As a result, employers and others who are damaged - or likely to be damaged - by the action may take civil proceedings in the courts against the union/individual.
See the legal consequences of failing to gain statutory immunity.
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Lawful industrial action
The need to meet certain conditions before a union or individual can lawfully call for industrial action.
When a worker takes industrial action, they will usually be in breach of their contract of employment or contract for services.
This means that if a trade union calls for, threatens to call for, or otherwise organises industrial action, it is - in practice - calling for the breach, or interference with the performance, of employment contracts.
They may also be interfering with the ability of the employer of those taking the industrial action, and of other employers, to fulfil commercial contracts.
It is unlawful in civil law to induce - or threaten to induce - people to break a contract or to interfere with the performance of a contract. This means that a trade union would face legal action and claims for damages for calling for industrial action.
Therefore, to allow trade unions or others to call for, threaten to call for, or otherwise organise industrial action lawfully, the law expressly gives them immunity from legal actions under civil law.
However, to obtain this immunity, they must meet certain statutory conditions when organising industrial action. These conditions are that:
- the action is called by someone authorised to do so, as set out in the Trade Union rule book
- there needs to be a 'trade dispute'
- an industrial action ballot must be held
- a notice of industrial action must be provided to the employer
- the action is not 'secondary action'
- the action is not to promote closed-shop practices
- the action is not in support of an employee dismissed for taking unofficial industrial action
- the action is not to enforce trade union membership against non-union firms
- the action doesn't involve unlawful picketing
See statutory conditions for immunity when organising industrial action.
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Legal issues during industrial action
The rules for dismissal during industrial action or picketing, and pay for striking workers.
You need to be aware of your own and your workers' legal position during industrial action.
1. Picketing
When pickets try to persuade people not to go to work or not to deliver or collect goods, they may - in effect - be inducing them to break or interfere with the performance of their employment contracts.
They may also be interfering with the ability of the employers of those people to fulfil their commercial contracts.
Such inducement in the course of picketing is not itself lawful simply because the industrial action supported by the picketing is lawfully organised. For the picketing to be lawful, it must satisfy certain conditions laid down by the law.
These conditions include the following:
- that the picketing is at or near the pickets' own place of work
- that the purpose of the picketing is to peacefully obtain or communicate information, or to peacefully persuade a person to work or not to work
However, there are three exceptions to the rule that an inducement in the course of picketing has immunity only if it is done at or near the pickets' own place of work:
- a trade union official may accompany a member of their union whom they represent so long as the member is picketing at their own place of work
- a person - eg a mobile worker - who does not normally work at one particular place, or for whom it is impracticable to picket at their actual place of work, may picket at the premises of the employer for whom they work or from which the work is administered
- a person who is not in employment may picket at their former place of work in contemplation or furtherance of a trade dispute, but only if the termination of their employment gave rise to - or is connected with - the dispute in support of which they are picketing
Picketing that is not peaceful and, for example, leads to violent or abusive behaviour, intimidation, or obstruction of the highway, is likely to involve offences under the criminal law. The law gives no protection to people who commit such offences in the course of picketing and they may be arrested and prosecuted by the police.
The Department for the Economy's statutory code of practice on picketing recommends that pickets and their organisers should ensure that in general, the number of pickets does not exceed six at any entrance to a workplace.
Failure to observe the provisions of the code does not in itself render a union, or anyone else, liable to any legal proceedings. However, where proceedings are brought against a union, the provisions of the code are admissible in evidence and may be taken into account by a court if they appear relevant to any question before it.
2. Notifying the employer before industrial action resumes
Where continuous industrial action is suspended, eg for further negotiations between the employer and union, the union must normally give the employer further notice before resuming the action.
The exception to this requirement is where the union agrees with the employer that the industrial action will cease to be authorised or endorsed with effect from a date specified in the agreement but that it may be authorised or endorsed again on or after another date specified in the agreement and the union:
- ceases to authorise or endorse the action with effect from the specified date
- subsequently reauthorises or re-endorses the action from a date on or after the originally specified date or such later date as may be agreed with the employer
For this exception to apply, the resumed industrial action must be of the same kind as covered in the original notice. This condition will not be met if, for example, the later action is taken by different or additional descriptions of workers. In order to avoid misunderstanding, both parties should put an agreement in writing.
3. Dismissal for taking industrial action
The dismissal of any striking employee during the first 12 weeks of lawfully organised official industrial action - the 'protected period' - will be deemed unfair if your reason for doing so is because the employee took industrial action.
The dismissal will also be unfair if the employee is dismissed after the protected period, but has stopped taking part in the industrial action before the end of the period.
If you 'lock out' your workforce during the protected period, the lock-out days are not counted when calculating the 12-week period.
The dismissal will also be unfair if:
- the employee is dismissed after the protected period - but had not stopped taking part in the industrial action before the end of the period
- you had failed to take reasonable steps to resolve the dispute
A dismissal can therefore be fair after the protected period if you can show that you made genuine attempts to negotiate a settlement with the trade union - including the proper use of any joint dispute resolution procedure, and have not unreasonably refused requests for third party conciliation or mediation.
Unfair dismissal claims may also be brought if you discriminate between employees by:
- dismissing some of those taking part in the action, but not others
- offering re-engagement selectively to some employees but not others within three months of the dismissal
An employee dismissed while taking part in unofficial action can't generally claim unfair dismissal. This is regardless of whether the employer has discriminated between those taking such action by dismissing - or re-engaging - only some of them.
However, there are cases where an employee who is dismissed during the course of unofficial industrial action will still be able to make a claim for unfair dismissal if they allege that the employer dismissed them for another reason. Generally, these cases relate to family reasons, health and safety, employee representation, and whistleblowing.
See dismissing employees.
4. Pay during industrial action
Where workers take strike action, they are in breach of contract and usually lose their right to pay for the hours they did not work. This may depend on the terms of the employment contract and the nature of the industrial action which the worker has taken.
The situation is more complex when workers take action short of an all-out strike, eg refusing to carry out particular duties. You may refuse to accept this conduct as satisfactory. However, if you accept partial performance of duties, you can't refuse to pay the worker for the part of the job they've carried out.
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Legal issues following industrial action
Re-engaging employees after a strike.
An employer may re-engage an employee dismissed during official industrial action on whatever terms the employer chooses, provided it offers the same terms to all dismissed workers.
During the three months following dismissal, an employer cannot selectively re-engage some employees and not others.
However, after three months, the employer can offer to re-engage any of the employees dismissed.
Any week during which an employee takes part in a strike doesn't count towards their continuous employment. This means that a calculation of an employee's length of employment will not include those days on which the employee was on strike. This could be important if an employee later needs to rely on their total length of employment to claim certain rights, eg statutory redundancy pay or unfair dismissal. See continuous employment and employee rights.
However, taking part in a strike won't break an employee's continuity of employment. This means that the terms and conditions of their employment contract won't be discontinued during the strike and then restarted afterward, but will effectively continue during the strike action.
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Conducting negotiations to resolve disputes
The importance of effective negotiating styles and skills when dealing with disputes.
Unless you have internal expertise, you may need external specialist negotiators to resolve some disputes.
Who should conduct the negotiations?
In most disputes, negotiating with your workers or their representatives face-to-face will be the quickest, cheapest, and easiest way of sorting out the problem. Both parties to the dispute will know what the issues are and can look for solutions that fit your needs.
Where written procedures exist, they will usually specify who should undertake the negotiations at the various stages and how they should be conducted. Such procedures will be the norm where trade unions are recognised.
In larger, more complex disputes, it may be better to enlist trained people to help with the negotiations.
Trade unions can supply their full-time officers to act as negotiators for their members. Employers' organisations and some firms of solicitors or other professional advisers can supply negotiators to employers. See choose a solicitor for your business.
It might be more cost-effective to train particular staff in negotiating skills. Trade unions also provide such training to their workplace representatives.
The Labour Relations Agency can help facilitate negotiations through collective conciliation.
Negotiating styles
There are two main ways to approach negotiations, and which one is used can affect how fast a dispute is resolved.
The first is the positional win-lose approach. Each negotiator will start by making demands, then each will try to trade off demands against concessions at the best rate they can. All possibilities will be considered as each side will put all their demands as early as possible to get them into the bargain, but this can sometimes be acrimonious and it can lead to long negotiations as each demand is discussed in detail.
The second style employed by negotiators is the principled win-win approach. The two sides compare their overall objectives to find common areas of benefit that can be agreed upon. Often this can be achieved by looking beyond the initial demands to discover the underlying ones.
For instance, do you really want to cut your wages bill or are you actually trying to find a way to increase profitability? Do your workers really want shorter hours or are they looking for more family-friendly and flexible working patterns? The win-win approach is less confrontational but risks being seen as a compromise that may not be the best result for anyone.
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The legal consequences of failing to gain statutory immunity
How the law works when the statutory immunities do not apply, making any subsequent industrial action unlawful.
Where statutory immunity for organising industrial action has not been met, eg because a union or individual has failed to organise a proper secret ballot, employers and others (such as their customers and suppliers) who are damaged - or likely to be damaged - by the action may take civil proceedings in the courts against the union or individual.
However, the person wishing to bring civil proceedings must still show that:
- an unlawful, unprotected act has been done or is threatened
- they are party to a contract which will be - or has been - broken or interfered with by the unlawful act
- they are likely to suffer - or have suffered - loss as a result
In addition, an individual deprived of goods or services because of the unlawful organisation of industrial action can also bring proceedings to stop this happening.
However, for this purpose, the individual does not need to show that they are party to a contract, which will be - or has been - broken or interfered with by the unlawful act.
Who can be sued as a result of unlawful industrial action?
Civil proceedings will normally be taken against the trade union or individual organising the industrial action.
However, in the case of picketing, it may be possible to sue the individual pickets as well as those who organised the unlawful picketing. This is because the pickets are inducing interference with the performance of contracts.
Note that even if it's a union that is responsible for organising unlawful industrial action, this does not prevent legal proceedings from being brought against the individual organisers.
Trade union liability for inducing breach of contract
The law states the circumstances in which a trade union is to be held responsible for a relevant act, eg inducing - or threatening to induce - a breach or interference with the performance of a contract.
Where these circumstances apply, a union will be held responsible for a relevant act regardless of any term or condition to the contrary in its own rules, or in any other contractual provision or rule of law.
A union will be liable for any relevant act, which is done, authorised, or endorsed by:
- its executive committee
- its general secretary or president
- any person given power under the union's own rules to do so
- any other committee of the union or any official of the union
For these purposes:
- A 'committee of the union' is any group of persons constituted in accordance with the rules of the union.
- A relevant act will be taken to have been done, authorised, or endorsed by an official if it was done, authorised, or endorsed by a group of persons, or any member of a group, to which an official belonged at the relevant time if the group's purposes include organising or co-ordinating industrial action.
- An 'official' is any person who is an officer of the union or a branch or section of the union or any person who is elected or appointed in accordance with the union's rules to be a representative of its members. This includes any person elected or appointed who is an employee of the same employer as the members, or one or more of the members, they are elected to represent, eg a shop steward.
However, if a relevant act that is done (or authorised or endorsed) by such a committee or official is 'effectively repudiated' by the union's executive committee, general secretary, or president, the union will not be held liable.
In order to avoid liability in this way, the executive committee, president, or general secretary of the union must repudiate the act as soon as reasonably practicable after it has come to the knowledge of any of them, and the union must, without delay:
- give written notice of the repudiation to the committee or official in question
- do its best to give individual written notice of the fact and date of the repudiation to every member of the union who it has reason to believe is taking part - or might otherwise take part - in industrial action as a result of the act and give similar written notice to the employer of every such member
The written notice of repudiation given to the union's members must contain the following statement:
"Your union has repudiated the call (or calls) for industrial action to which this notice relates and will give no support to unofficial industrial action taken in response to it (or them). If you are dismissed while taking unofficial industrial action, you will have no right to complain of unfair dismissal."
However, even if it takes these steps, a union will not be considered to have 'effectively repudiated' an act if:
- the executive committee, president, or general secretary subsequently behaves in a way that is inconsistent with the repudiation
- at any time up to three months after the repudiation, a party to a commercial contract that has been, or maybe, interfered with by the relevant act, requests the union's executive committee, president, or general secretary to confirm that the act has been repudiated, and written confirmation is not then given
Remedies
Where statutory immunity does not apply, those party to contracts which are broken, or the performance of which is interfered with, by the organisation of - or a threat to organise - industrial action, may seek an injunction against the organisers from the courts.
A court may, after examining the circumstances, grant an injunction on an interim basis pending a full hearing of the case. However, the union or individual against whom the order is sought will have the legal right to be given a chance to put their case forward.
If an injunction is not obeyed, those who sought it can go back to court and ask to have those concerned declared in contempt of court.
Anyone found to be in contempt of court may face heavy fines or other penalties which the court may consider appropriate. For example, a union may be deprived of its assets through sequestration. This is where the funds are placed in the control of a person appointed by the court who may, in particular, pay any fines or legal costs arising from the court proceedings.
It is also possible to claim damages for losses suffered - which may, but need not, be preceded by an application for an injunction - if the basis of the proceedings is a claim that an act involved breach, or interference with the performance of contracts.
Note that there are upper limits on the amounts a court can award by way of damages in any proceedings against a trade union. These limits depend on the size of the union concerned.
Limits on awards for damages against a union organising unlawful industrial action
Number of trade union members Upper limit on award for damages Fewer than 5,000 £10,000 5,000 - 24,999 £50,000 25,000 - 99,999 £125,000 100,000 or more £250,000
Other unlawful acts during industrial action
Those who have organised lawful industrial action are only protected from legal action for a relevant act, eg inducing breaches, or interference with the performance of contracts.
As such, there is no immunity for strikers or their organisers who commit other civil wrongs or criminal offences.
For example:
- if strikers or their organisers commit a criminal offence, such as intentional damage to property, they are liable to be arrested and prosecuted by the police in the same way as anyone else who commits such an offence
- if strikers or their organisers commit an unlawful trespass, eg by entering premises without authority or by staging a 'sit-in', they are liable to be sued for that and any other unlawful acts involved just like any other members of the public who occupy premises unlawfully
Also, note that the union has immunity only if the sole ground of liability is a relevant act - such as inducing a breach of contract. If some other non-protected ground of liability exists, immunity will be lost.
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Conducting industrial action ballots
How a union must conduct a ballot before it can call for official industrial action.
If the employer and the union have exhausted all other available means of resolving a dispute, the union may feel that there is no alternative but to call on its members to take industrial action.
However, for the industrial action to be lawful, it must meet certain conditions. One of these is that the union calling for the action must hold a properly conducted secret ballot.
For information on the other conditions, see lawful industrial action.
The law sets out certain requirements that the union must satisfy for the ballot to be legitimate. These requirements are set out below.
1. Independent scrutiny
For a ballot where more than 50 members have the right to vote, the union must appoint a qualified independent person as the scrutineer of the ballot. Information on who qualifies as a scrutineer is available from the Labour Relations Agency (LRA) - contact the LRA.
The total number of members with the right to vote can be an aggregate number of members from one - or more than one - workplace and where this is more than 50, scrutiny procedures must be followed.
A scrutineer must be, to the best belief of the union, independent of the union and able to carry out their duties competently.
The scrutineer's terms of appointment must include producing a report on the conduct of the ballot. They must produce the report as soon as reasonably practicable after the date of the ballot - and not later than four weeks after that date.
The union must provide a copy of the scrutineer's report to any union member who was entitled to vote in the ballot and any employer of such a member who requests one within six months of the date of the ballot.
The copy must be supplied as soon as reasonably practicable and free of charge - or on payment of a reasonable fee specified by the union. The scrutineer's report must say whether or not the ballot has been conducted fairly and lawfully.
See the Department for the Economy's code of practice on industrial action ballots and notice to employers for further information on scrutineers.
2. Sending employers notice of the ballot and a sample voting paper
The union must take such steps as are reasonably necessary to ensure that any employer of any union members who are entitled to vote receives certain information.
The union must send this information not later than the seventh day before the intended opening day of the ballot, ie the first day when a voting paper is sent to any person entitled to vote.
The notice must be in writing and must:
- state that the union intends to hold the ballot
- specify the date which the union reasonably believes will be the opening day of the ballot
- provide a list of the categories of employee to which the employees concerned belong, a list of the workplaces at which the employees concerned work, figures on the number of employees in each category, the number of employees at each workplace, the total number of employees concerned plus an explanation of how these figures were arrived at
Note that the lists and figures mentioned above do not need to be provided in full where the workers concerned pay their union subscriptions by deduction from pay at source, ie through the so-called 'check off' system.
In such circumstances, the notice must contain either:
- those same lists, figures, and explanations as set out above
- information that will allow the employer to easily work out the total number of employees concerned, the categories of employee to which they belong, the number of employees concerned in each of those categories, the workplaces at which the employees concerned work, and the number of them at each of these workplaces
The 'employees concerned' are those whom the union reasonably believes will be entitled to vote in the ballot.
Not later than the third day before the intended opening day of the ballot, the union must send the employer a sample of the voting paper (and any variants of it) which will be sent to the workers concerned.
The paper must:
- state the name of the independent scrutineer, where appropriate
- give the return address, and the date, it is to be returned by
- have a number, which is one of a series of consecutive numbers used to give a different number to each voting paper
- make it clear whether voters are being asked if they are prepared to take part in - or to continue to take part in - industrial action which consists of a strike, or industrial action short of a strike (which includes overtime bans and call-out bans)
- specify the person(s) and/or class(es) of person(s) who the union intends to have authority to make the first call for industrial action relating to the ballot, if the vote is in favour of industrial action
The paper must also contain the following statement: "If you take part in strike or other industrial action, you may be in breach of your contract of employment. However, if you are dismissed for taking part in a strike or other industrial action which is called officially and is otherwise lawful, the dismissal will be unfair if it takes place fewer than twelve weeks after you started taking part in the action, and depending on the circumstances may be unfair if it takes place later."
That statement must not be qualified or commented upon by anything else on the voting paper.
3. Timing of the ballot and related action
If members vote in favour of industrial action, the action must begin within four weeks of the date of the ballot.
However, a union may be allowed to make its first call for industrial action more than four weeks after the date of the ballot if either:
- the employer and union agree on an extension of up to a further four weeks, eg to continue with talks that are making progress
- an injunction granted by a court (or an undertaking given by the union to the court) prohibits the union from calling for industrial action during some part, or the whole, of the four weeks following the date of the ballot, and the injunction subsequently lapses or is set aside, or the union is released from its undertaking
In the latter case, a union may apply for a court order which, if granted, would provide that the period of the prohibition would not count towards the four-week period for which ballots are normally effective.
The union must apply to the court no more than eight weeks after the date of the ballot. In such cases, the ballot cannot be effective if a union's first call for industrial action is made more than 12 weeks after the date of the ballot.
If the court believes that the result of a ballot no longer represents the views of union members, or that something has happened or is likely to happen that would result in union members voting against taking, or continuing with, action if there were a fresh ballot, it may not make such an order.
Note that a union cannot gain statutory immunity merely by holding a properly conducted secret ballot after previously calling for industrial action without one.
4. Entitlement to vote
All those members whom the union - at the time of the ballot - reasonably believes will be induced by the union to take part in or continue with the industrial action, must be given the equal entitlement to vote. No one else may be given a vote - otherwise, the ballot will be invalid.
The union may choose whether or not to give a vote to 'overseas members', ie members other than merchant seamen and offshore workers who are outside Northern Ireland at the time of the ballot.
However, members who are in Great Britain throughout the voting period for an industrial action ballot and who will be called upon to take part in, or continue with the industrial action must be given entitlement to vote in the ballot if either:
- their place of work is in Northern Ireland and the ballot is of members at their place of work
- the industrial action to which the ballot relates will involve members in Great Britain as well as Northern Ireland and the ballot is a general one covering workplaces in both Great Britain and Northern Ireland
Members required to be given entitlement to vote by either of these requirements do not count as 'overseas members' for the purposes of the law on industrial action balloting.
The ballot will also be invalid if anyone denied entitlement to vote is subsequently called on to take part in the action by the union with the exception of union members who either:
- were not members at the time of the ballot
- were members at the time of the ballot but who it was not reasonable for the union to expect to be called upon to take action, eg because they changed jobs after the ballot
Where the members of a union with different workplaces are to be balloted, a separate ballot will be necessary for each workplace unless one of the conditions set out below is met. It will be unlawful for the union to organise industrial action at any such workplace where a majority of those voting in the ballot for that workplace have not voted 'Yes' in response to the relevant required question(s). If a worker works at or from a single set of premises, their workplace is those premises. If not, it is the premises with which their employment has the closest connection.
In summary, the conditions for holding a single ballot for more than one workplace are that:
- at each of the workplaces covered by the single ballot there is at least one member of the union affected by the dispute
- entitlement to vote in the single ballot is given and limited to all of a union's members who, according to the union's reasonable belief, are employed in a particular occupation or occupations by one employer or any of a number of employers with whom the union is in dispute
- entitlement to vote in the single ballot is given and limited to all of a union's members who are employed by a particular employer or any of a number of employers with whom the union is in dispute
It is possible for a union to hold more than one ballot on a dispute at a single workplace. If the conditions above are met, some or all of those ballots may also cover members in other workplaces.
5. Voting procedures
Voting must be made by the marking of a voting paper. The union should have sent the employer a sample of this at least three days before the start of the voting.
Those voting must be allowed to do so without interference from or constraint imposed by the union or any of its members, officials, or workers.
So far as is reasonably practicable, every member properly entitled to vote must be:
- able to vote in secret
- given a convenient opportunity to vote by post at no direct cost to themselves
- sent a voting paper by post to their home address or any other address which they have asked the union, in writing, to treat as their postal address
There is a limited exception to these rules for the balloting of union members who are merchant seamen and the union reasonably believes that they will be employed in a ship at sea (or outside Northern Ireland) at some time during the voting period and that it will be convenient for them to vote while on the ship or where the ship is.
The voting paper must ask whether or not the voter is prepared to take part in - or continue to take part in - either:
- a strike
- action short of a strike, eg, an overtime or call-out ban
While the question(s) may be framed in different ways, the voter must be able to answer either 'Yes' or 'No' to indicate whether they are willing to take part in - or continue with - the industrial action.
The voting paper must specify the person(s) or description of the person(s) who the union intends to have authority to call for industrial action to which the ballot relates if the vote is in favour of industrial action.
For this purpose, anyone so specified need not be authorised under the union's rules to call on members to take industrial action but must be among those for whose acts the union is responsible in law.
6. Majority support
Majority support must be obtained in response to the question(s) on the voting paper that is appropriate to the type of industrial action concerned, ie:
- in the case of a strike, majority support must be obtained in response to a question on the voting paper which asks if members are prepared to take part in (or continue with) strike action
- in the case of action short of a strike, majority support must be obtained in response to a question on the voting paper which asks if members are prepared to take part in (or continue with) action short of a strike
- if the action consists or may consist of a strike and other industrial action, majority support must be obtained for each type of action in response to separate questions on the voting paper asking if members are prepared to take part in (or continue with) each type
Majority support means the majority of those who actually vote, not the majority of those entitled to vote.
7. Announcing ballot results
A union must, as soon as reasonably practicable after holding an industrial action ballot, take steps to inform all those entitled to vote, and their employer(s), of the number of:
- votes cast in the ballot
- spoiled voting papers
- individuals answering 'No' to the required question(s)
- individuals answering 'Yes' to the required question(s)
Where separate workplace ballots are required, these details must be notified separately to those entitled to vote at each workplace.
If overseas members of a trade union have been given entitlement to vote in an industrial action ballot, the detailed information about its result need not be sent to them. However, the information supplied to non-overseas members in accordance with the statutory requirements must give separate details relating to overseas and non-overseas members. For these purposes, members in Great Britain given entitlement to vote do not count as overseas members.
8. Consequences of a union's failure to meet balloting requirements
If a union fails to satisfy the statutory requirements relating to the ballot or to give employers notice of industrial action (apart from certain small accidental failures that are unlikely to affect the result), this failure will give grounds for proceedings against a union by:
- a customer
- an employer
- a supplier of an employer
- an individual member of the public claiming that an effect or likely effect of the industrial action would be to prevent or delay the supply of goods or services to them or to reduce the quality of goods or services supplied
With the exception of failures to comply with the requirements to give notice to employers, such failures will also give grounds for action by the union's members.
If a union fails only to provide the required notice of intent to ballot or the sample voting paper to a particular employer who should have received it, only that employer or any individual deprived of goods or services because of the industrial action can bring proceedings.
Failure to satisfy any other balloting requirements will expose the union to proceedings brought by others, eg by its own members.
9. Calls for industrial action from individuals unspecified on the voting paper
A ballot will not give a union statutory immunity from legal proceedings if industrial action is called by a person not specified or described on the voting paper.
Therefore, if someone calls for action other than a specified person and no call is made by a specified person, the union would be at risk of proceedings being brought against it unless it effectively repudiated the call.
10. Statutory code of practice on industrial action notices and ballots
The Department for the Economy's statutory code of practice for industrial ballots and notice to employers promotes good practice in the conduct of industrial action ballots arranged by a trade union and in the preparation of notices to employers.
Failure to observe the provisions of the code does not in itself render a union, or anyone else, liable to any legal proceedings. However, where proceedings are brought against a union, the provisions of the code are admissible in evidence and may be taken into account by a court if they appear relevant to any question before it.
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Calculate final pay when a worker leaves
In this guide:
- Staff pay
- What counts as pay?
- Issue pay slips to employees
- Statutory payments
- Guarantee pay: employee entitlement
- How to calculate guarantee pay
- Paying the National Minimum Wage and National Living Wage
- Paying workers holiday pay
- Making deductions from a worker's pay
- Direct Earnings Attachments (DEA): making deductions from an employee's salary
- Direct Earnings Attachment (DEA) payment schedule
- Calculate final pay when a worker leaves
What counts as pay?
Understand what counts as pay and what doesn't when paying a worker.
What is included as pay?
The following counts as pay:
- fees
- bonuses and commission
- holiday pay
- statutory payments, eg statutory sick, maternity, paternity, shared parental pay, adoption pay and parental bereavement pay
- overtime
- notice pay
What does not count as pay?
Pay does not include:
- loans to the worker
- refunds for expenses
- redundancy payments
- tips paid directly to the worker
- employer contributions to a pension scheme
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Issue pay slips to employees
Obligations for employers to issue itemised pay statements and penalties for not giving notice of variations in fixed deductions in staff pay.
As an employer, you are legally obliged to give each employee a written itemised pay statement, usually known as a payslip or wage slip. You must issue it at, or before, the time you pay your employee.
This right to receive an itemised pay statement does not apply to:
- people you pay who are not employees, eg freelancers and contractors
- certain other groups, including police and some people who work at sea
Pay slip: what you must include
An itemised pay statement or pay slip must show:
- gross wages or salary before deductions
- any fixed deductions - and the reasons for taking them - or the total figure for fixed deductions when you have provided a separate standing statement of the details
- any variable deductions - and the reasons for taking them
- net wages or salary payable after deductions
- a breakdown of each part-payment - such as part by cheque, part in cash
Standing statements of fixed deductions from pay
A pay statement does not have to include the amount and purpose of every separate fixed deduction every time.
However, if you don't issue a payslip that does this, you must give the employee a standing written statement of fixed deductions at least once every 12 months.
This must state for each item deducted:
- the amount
- the intervals at which the deduction is made
- the purpose or description, eg trade union subscription
You must give the employee this statement at, or before, the time of issuing any pay statement that quotes the total figure of fixed deductions.
Variations in fixed deductions
If there is any change to an employee's fixed deductions, you must give them either:
- notification in writing of the details of the change
- an amended standing statement of fixed deductions, which is then valid for up to 12 months
If a dispute occurs in the workplace between you and your employee, you may wish to seek advice and assistance from the Labour Relations Agency (LRA). The LRA may be able to help with resolving disputes before they escalate into a tribunal claim.
Tribunal claims in relation to pay statements
An employee may complain to an industrial tribunal where you have:
- Failed to give them any kind of pay statement.
- Not included all the required details in an itemised pay statement or standing statement of fixed deductions. As an employer, you can also apply to a tribunal for a decision on what should be included in a pay statement or standing statement.
- Dismissed them for seeking to enforce a right in relation to a pay statement. This right applies regardless of the employee's length of service.
Employees must make their complaint while employed by you or within three months of leaving your employment.
An industrial tribunal cannot deal with a question that is only about the accuracy of an amount in a statement.
Compensation for claims in relation to pay statements
A tribunal may award an employee compensation at its discretion if it finds that you made un-notified deductions of pay, ie deductions that did not appear on a pay statement or a standing statement.
The discretionary amount awarded will not exceed the total of the un-notified deductions during the 13 weeks immediately before the date the employee made their application to the tribunal.
All un-notified deductions enter into this calculation, whether or not they were made in breach of a contract of employment.
Arbitration services
The LRA provides an alternative to the Industrial Tribunal under the Labour Relations Agency Arbitration Scheme. Under the Scheme claimants and respondents can choose to refer a claim to an arbitrator to decide instead of going to a tribunal. The arbitrator's decision is binding as a matter of law and has the same effect as a tribunal.
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Statutory payments
Employee entitlement to statutory payments.
An individual may be entitled to a statutory payment if they:
- become a parent, including through adoption
- are off work due to illness
- are laid-off
- to deal with issues related to domestic abuse
To qualify for statutory payments, the individual must be an employed earner, ie someone working for an employer who is liable to pay secondary Class 1 National Insurance contributions on their wages or salary.
Statutory pay for parents
To be eligible for statutory maternity, statutory paternity, statutory adoption, statutory parental bereavement, or shared parental leave and pay, the individual must:
- meet certain qualifying criteria relating to minimum earnings, continuous employment, and - in paternity and adoption cases - their relationship with the child and the biological mother/other adoptive parent
- comply with certain notification rules
Statutory sick pay
Under certain conditions, you may have to pay statutory sick pay to an employee.
This is the minimum level of payment you must make to someone who is off work through illness. Their contract with you may also entitle them to more than this.
New pending legislation - Statutory Safe Leave
The passing into law of the Domestic Abuse (Safe Leave) Act (Northern Ireland 2022 will mean that employers in Northern Ireland will have the duty to offer at least 10 days of paid leave for victims of domestic abuse each leave year for the purposes of dealing with issues related to domestic abuse.
Although the commencement date of the legislation is yet to be confirmed, employers can take steps within their businesses to prepare for it by creating an environment where employees feel safe to disclose that they are experiencing domestic abuse. See workplace policy on domestic and sexual abuse.
Statutory payments: further information
Find out more about qualifying for:
- Maternity leave and pay
- Adoption leave and pay
- Paternity leave and pay
- Statutory sick pay and leave
- Shared parental leave and pay
- Parental Bereavement Leave and Pay
You can also call the HMRC Employer Helpline on Tel 0300 200 3200.
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Guarantee pay: employee entitlement
What guarantee pay is and who is eligible for it.
You may have to pay your employees a guarantee payment if you cannot provide them with employment on a day when they would normally work for you under their contract of employment.
This is to compensate for the loss, through no fault of their own, of what they would have earned in normal circumstances.
Entitlement to guarantee pay
Individuals are entitled to guarantee pay if they meet the following conditions:
- they are an employee, ie they are working under a contract of employment - see employment status
- they are not an excluded employee, as defined below
- they have worked for at least one month's continuing employment up to the day before the one that guarantee payment is being claimed for
- they have normal working hours and are normally required to work in accordance with their contract of employment
- the day they claim for is not a day they were on holiday, were sick, or not required to work under the contract of employment
- they must not have worked at all on what would be a normal working day (a day being the 24-hour period from midnight to midnight)
- the absence of work was not caused by industrial action, involving any of your other employees or employees working for your subsidiary or parent company
- the reason they did not work is because there was a recession in the employer's business or anything else disrupted the normal working of the employer's business, for example, a natural disaster or failing power supply
- they have not unreasonably refused an offer from you of suitable alternative work - this can be work other than what they normally do
- they have complied with any reasonable requirements imposed by you to ensure their services are available
Excluded employees
You do not have to pay guarantee pay to excluded employees. These are:
- masters and crew members involved in share fishing who are paid solely by a share in the profits or gross earnings of a fishing vessel
- members of the police service and armed forces
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How to calculate guarantee pay
How to work out the amount of guarantee pay you must pay your staff and what the exceptions are.
To calculate guarantee pay, multiply the number of hours your employee would normally have worked on the day in question (as stated in their terms and conditions of employment) by their hourly rate.
Statutory guarantee pay is subject to an upper limit of £38 per day. This amount changes every year. Statutory entitlement is limited to five days in any three-month period. This entitlement is reduced pro rata for employees who work fewer than five days a week.
You do not have to pay guarantee pay for voluntary overtime.
Exemptions from the statutory guarantee pay provisions
The Department for the Economy can grant an exemption from the statutory provisions if you have your own collective agreement. For this agreement to be valid, all parties to the agreement must be making the application for exemption, ie you and your employee, and the guarantee payment must be as favourable overall to your employees as the statutory provisions.
The agreement must also provide a complaints procedure that either includes a right to independent arbitration in the event of a deadlock or specifies that your employee may complain to an industrial tribunal - in which case the tribunal would have jurisdiction over the agreement.
The Employment Rights (NI Order) 1996 also provides for an exemption being granted by the Department of Agriculture, Environment & Rural Affairs (DAERA) where there is an Agricultural wages order under which employees to whom the order relates have a right to guaranteed remuneration.
You do not have to pay statutory guarantee pay on top of any contractual entitlement.
Employment protection rights
It is unlawful to dismiss an employee for seeking guarantee pay.
It is also unlawful not to pay guarantee pay to an employee if they are entitled to it.
In both of these cases, the employee can complain to an industrial tribunal.
Arbitration services
The Labour Relations Agency (LRA) provides an alternative to the Industrial Tribunal under the Labour Relations Agency Arbitration Scheme. Under the Arbitration Scheme claimants and respondents can choose to refer a claim to an arbitrator to decide instead of going to a tribunal. The arbitrator's decision is binding as a matter of law and has the same effect as a tribunal.
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Paying the National Minimum Wage and National Living Wage
You must ensure you pay your workers at least the National Minimum Wage or National Living Wage depending on their eligibility.
Most workers who are above compulsory school age must be paid at least the National Minimum Wage or National Living Wage.
The rate you must pay varies depending on the worker's circumstances.
To find out how to calculate a worker's pay for the purpose of comparing it to the appropriate minimum wage rate, see National Minimum Wage and National Living Wage - calculating minimum wage pay.
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Paying workers holiday pay
Employees' entitlement to paid annual leave.
A worker is entitled to take at least 5.6 weeks paid annual leave.
This is equivalent to, for example:
- 28 days for those who work five days a week
- 16.8 days for those who work 3 days a week
Bank and public holidays
The minimum paid annual leave entitlement can include bank and public holidays.
Workers have no statutory right to take a day's leave on any bank or public holiday or to higher rates of pay if they work on such days.
You must set out in an employee's written statement of employment their holiday entitlement, including arrangements for bank and public holidays, and holiday pay.
Carrying over annual leave
Workers must take at least four weeks' annual leave. Any additional leave may be carried over to the following leave year where this is agreed by you and your worker.
Payment in lieu of annual leave
The only time you can make a payment in lieu of any outstanding holiday is when a worker's employment ends.
Rates of holiday pay
The rate of holiday pay is generally the normal rate for the worker. So for those workers who are paid monthly, their annual salary is divided into 12 equal payments and when they take a holiday it has no effect on their pay slip.
Case law has determined that guaranteed and non-guaranteed overtime should be considered when calculating a worker's statutory holiday pay. Further, the Court of Appeal in Northern Ireland determined that where voluntary overtime constitutes part of an employee's 'normal working week' - this also may need to be taken into account when calculating holiday pay.
You only have to work out a special payment where your workers have varying pay rates, such as piece work. In those cases, the holiday pay will be equal to the average rate over the 12 weeks before the holiday.
Any week in which no pay was due should be replaced by the last previous week in which pay was received to bring the total to twelve.
This only applies to the statutory holiday periods. If you offer extra leave over and above the 5.6 weeks (including bank and public holidays) the rate of pay for these can be whatever is agreed with your employees.
Rolled-up holiday pay
It is unlawful not to pay a worker while they are on holiday and instead include an amount for holiday pay in the hourly rate of pay - something known as 'rolled-up holiday pay'.
You must always pay a worker their normal pay while they are actually taking their leave.
No fixed hours
If your workers do casual work with no normal hours, for example, on a zero-hours contract, the holiday pay of each worker will be based on the average pay they got over the previous 12 weeks.
These should be weeks in which they were paid. If they were not paid in one of those 12 weeks, because they did not work, the last paid week before that should be used to calculate their holiday pay.
Term-time or part-year workers
Recent case law has determined workers employed on a continuous contract throughout the year, and who work for varying hours during certain weeks of the year, such as those who work only term-time, are entitled to 5.6 weeks of leave each year. This entitlement applies regardless of the fact that there are some weeks in the year when they do not work.
In such instances holiday pay is calculated by averaging the pay received during the 12 weeks prior to the commencement of their leave. If there are weeks during the 12-week period where no pay was received, these weeks are disregarded and the employer must count back to include a total of 12 weeks in which pay was received.
Although there may be times when a part-year worker receives a higher payment than a full-time worker - this is compliant with the Part-Time Workers (Prevention of Less favourable Treatment) Regulations (Northern Ireland) 2000, as the part-time worker is not being treated less favourably. There is no legislative provision to prevent part-time workers from being treated more favourably.
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Making deductions from a worker's pay
Legally required deductions such as National Insurance and income tax.
You must not make deductions from a worker's pay unless:
- they are legally authorised, eg PAYE (Pay As You Earn) income tax, National Insurance contributions, deductions from earnings orders, student loan repayments
- they are allowed by the worker's contract - workers must have a copy of the relevant contractual term or a written explanation before you make the deduction
- they have agreed to the deduction in writing before the deduction was made
You don't always have to meet these conditions, for example, when:
- you make deductions to refund an overpayment of wages or expenses
- the worker is on strike
- the deduction is to satisfy a court order, eg to recover debts
Deductions for child maintenance
The Child Maintenance Service (CMS) of the Department for Communities (DfC) may ask you to make deductions from an employee's pay for child maintenance purposes. They may issue you with a deduction from the earnings order and ask you to establish a regular pattern of payments. See how to make child maintenance deductions from an employee's pay.
Direct Earnings Attachments
You may be asked as an employer to deduct benefit overpayments, including social fund loans, that an employee owes the Department for Communities (DfC) from their pay. Read more on Direct Earnings Attachments: making deductions from an employee's pay.
Deductions from the wages of retail workers
If your workers do retail work, you may make deductions from wages to recover cash shortages or stock deficiencies only if, in addition to meeting the above conditions, you:
- inform the worker, in writing, of the total shortfall you are recovering before you make the deduction
- issue a written demand on a payday for the repayment
- make the deduction - or the first in a series - no sooner than their first payday after telling them of the shortfall or, if you tell them on a payday, not before that day
- do not deduct more than one-tenth of the worker's gross pay on any given payday - you can recover any remaining shortfall on future paydays (note that one-tenth of gross pay does not apply when making the final payment on termination of employment)
- make the first deduction within 12 months of discovering the shortage
You should ensure that any deductions for shortages or stock deficiencies are not made unless you have conducted a thorough investigation to establish that the employee is liable for these. You should also take care when making any deductions not to breach minimum wage, as deductions must not reduce your employee's pay below the current minimum wage rate.
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Direct Earnings Attachments (DEA): making deductions from an employee's salary
The Department for Communities will write to you if you need to make DEA deductions for an employee.
Difficulty repaying a benefit or Welfare Supplementary Payment overpayment, Social Fund, or Discretionary Support Loan?
If your employee is having difficulty repaying their benefit overpayment, Social Fund, or Discretionary Support loan, they should act as soon as possible. Even if they have contacted the Department for Communities (DfC) before, they can get in touch to ask them to consider reducing the amount they repay.
If an employee is struggling financially or knows their repayments are no longer affordable, they can ask for them to be reduced by contacting Debt Management.
Further information is also available on financial support and advice from DfC.
As an employer, you may be asked to make deductions from an employee's pay towards benefit overpayments and Social Fund loans that the employee owes to the Department for Communities (DfC). This method of recovery is known as a Direct Earnings Attachment or DEA.
The DfC Debt Management will write to you with an instruction to set up and maintain a DEA if any of your employees are affected.
How a DEA works
Any instruction you receive from the DfC will state the total amount to be recovered from the employee's salary. It is important to note that this is the total amount owed to the DfC and not a deduction amount which must be calculated as a percentage of net earnings. To operate the DEA, you will need to take the following steps:
- for each salary cycle, calculate how much to deduct from your employee's salary
- check if your employee has other debt orders to pay and if they take priority over a DEA
- advise your employee that money will be deducted from their salary in respect of monies owed to the DfC
- deduct the money from your employee's salary
- pay the money to DfC no later than the 19th day of the month following deduction in your payroll
- continue to make employee deductions and payments to the DfC until the total amount stated in the instruction has been repaid or the DfC tells you to stop
Record keeping for DEA
You must keep a record of deductions and tell the DfC when an employee leaves your company.
You could be fined up to £1,000 if you don't make DEA deductions when requested to.
Download Direct Earnings Attachment employer guidance (PDF, 1.0MB).
Employer help with DEA or payments
You can also call the employer helpline if you have questions about how to run a DEA or pay the DfC:
Employer Helpline
0800 587 1322 (Monday to Friday, 9am to 4pm)
Calculating the DEA deduction
There are two deduction percentage rates which may be used for calculation - Standard Rate and Higher Rate.
The instruction from DfC Debt Management will let you know which of these rates to apply. The rate may change throughout the life of the DEA, from Standard to Higher and vice versa, and you will be notified of this by letter.
To calculate the deductions from your employee's salary, for each salary cycle you'll have to:
- work out the employee's earnings after tax, class 1 National Insurance, and workplace pension contributions (net earnings)
- check if the employee has other debt orders and if they take priority over a DEA
- use the tables below (standard or higher) to establish the appropriate percentage deduction rate
- multiply the net earnings figure by the percentage rate to calculate the DEA amount
Note: if you are calculating a DEA based on a daily rate, you must also multiply the daily rate figure by the number of days in the pay period.
If payments are made every two or four weeks, calculate weekly pay and deduct the percentage in the table.
If the total of all deductions is more than 40% of the employee's net earnings, the DEA must be adjusted.
Deductions from earnings rate
AMOUNT OF NET EARNINGS
(Net earnings are gross pay, less income tax, Class 1 National Insurance, and superannuation contributions)
Deduction from Earnings Rate
(Standard)
Rate to apply (% of net earnings)
Deduction from Earnings Rate
(Higher)
Rate to apply (% of net earnings)
Daily Earnings
Weekly Earnings
Monthly Earnings
Up to £15
Up to £100
Up to £430
Nil
5% Between £15.01 and £23
Between £100.01 and £160
Between £430.01 and £690
3%
6% Between £23.01 and £32
Between £160.01 and £220
Between £690.01 and £950
5%
10% Between £32.01 and £39
Between £220.01 and £270
Between £950.01 and £1,160
7%
14% Between £39.01 and £54
Between £270.01 and £375
Between £1,160.01 and £1,615
11%
22% Between £54.01 and £75
Between £375.01 and £520
Between £1,615.01 and £2,240
15%
30% £75.01 or more
£520.01 or more
£2,240.01 or more
20%
40%
What counts as earnings?
When calculating DEA payments, you should include as earnings:
- wages and salary
- fees
- bonuses
- commission
- overtime pay
- occupational pensions if paid with wages or salary
- compensation payments
- Statutory Sick Pay
- most other payments on top of wages
- pay in lieu of notice
Don't count:
- Statutory Maternity Pay
- Statutory Adoption Pay
- Ordinary or Additional Paternity Pay
- guaranteed minimum pension
- any money that the employee gets from the Government e.g. benefits, pensions or credits
- Statutory Redundancy Pay
- expenses
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Direct Earnings Attachment (DEA) payment schedule
The supporting payment schedule for a DEA that must be completed and issued in order to ensure that the correct payment is allocated to the correct debtor account.
The Department for Communities (DfC) requires that a supporting payment schedule for Direct Earnings Attachment (DEA) be completed and issued in order to ensure that the correct payment is allocated to the correct debtor account. This schedule is only required if you are making one overall payment in respect of several employees. However, if you are making a single DEA payment by cheque, you must send a payment schedule.
For a single DEA payment, please ensure that you include your employee's National Insurance number and not their name.
DfC Debt Management has introduced an email route to receive payment schedules from employers, this is the preferred way for payment schedules to be sent.
DEA payment schedule template
Download the payment schedule template for DEA (XLSX, 82K).
For data security reasons the data required for the email payment schedule is slightly different to that on the paper schedule. By restricting the data recorded on the email payment schedule DfC Debt Management will still have enough information to correctly allocate payments to our customer records, whilst minimising the risk of personal data being fraudulently used should the email fall into the hands of a third party. Schedules do not need to be encrypted before emailing.
The postal route for sending payment schedules remains in place and a schedule template for use when forwarding schedules is available in appendix 2 of the DEA: a guide for employers (PDF, 1.0MB).
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Calculate final pay when a worker leaves
Deductions to make from outstanding pay owed when an employee leaves the business.
When a worker leaves your employment, you must give them:
- any outstanding pay, including overtime
- pay in lieu for any untaken holiday
- bonus payments, if earned
- any statutory sick pay, if they are entitled to it
- pay instead of notice if you do not require them to work their notice period - note that the contract of employment must provide for this, otherwise the employee must agree to it
- redundancy payment, if due
If the worker leaves before or during their statutory maternity or adoption pay period, you must also start paying - or continue to pay - them statutory maternity or adoption pay.
You could also give them:
- a pension refund, depending on the rules of the scheme
- a lump-sum payment as compensation for loss of their job
- an enhanced redundancy payment if you have made them redundant - this might be either contractual or paid on a discretionary, and non-discriminatory, case-by-case basis
What you should deduct from a worker's final pay
You must deduct the following items from what you owe the worker:
- income tax
- relevant National Insurance contributions
You might also need to consider deductions in respect of matters such as:
- money given for season ticket loans
- any other outstanding loans
- amounts to be paid under any car leasing agreements
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Making deductions from a worker's pay
In this guide:
- Staff pay
- What counts as pay?
- Issue pay slips to employees
- Statutory payments
- Guarantee pay: employee entitlement
- How to calculate guarantee pay
- Paying the National Minimum Wage and National Living Wage
- Paying workers holiday pay
- Making deductions from a worker's pay
- Direct Earnings Attachments (DEA): making deductions from an employee's salary
- Direct Earnings Attachment (DEA) payment schedule
- Calculate final pay when a worker leaves
What counts as pay?
Understand what counts as pay and what doesn't when paying a worker.
What is included as pay?
The following counts as pay:
- fees
- bonuses and commission
- holiday pay
- statutory payments, eg statutory sick, maternity, paternity, shared parental pay, adoption pay and parental bereavement pay
- overtime
- notice pay
What does not count as pay?
Pay does not include:
- loans to the worker
- refunds for expenses
- redundancy payments
- tips paid directly to the worker
- employer contributions to a pension scheme
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Issue pay slips to employees
Obligations for employers to issue itemised pay statements and penalties for not giving notice of variations in fixed deductions in staff pay.
As an employer, you are legally obliged to give each employee a written itemised pay statement, usually known as a payslip or wage slip. You must issue it at, or before, the time you pay your employee.
This right to receive an itemised pay statement does not apply to:
- people you pay who are not employees, eg freelancers and contractors
- certain other groups, including police and some people who work at sea
Pay slip: what you must include
An itemised pay statement or pay slip must show:
- gross wages or salary before deductions
- any fixed deductions - and the reasons for taking them - or the total figure for fixed deductions when you have provided a separate standing statement of the details
- any variable deductions - and the reasons for taking them
- net wages or salary payable after deductions
- a breakdown of each part-payment - such as part by cheque, part in cash
Standing statements of fixed deductions from pay
A pay statement does not have to include the amount and purpose of every separate fixed deduction every time.
However, if you don't issue a payslip that does this, you must give the employee a standing written statement of fixed deductions at least once every 12 months.
This must state for each item deducted:
- the amount
- the intervals at which the deduction is made
- the purpose or description, eg trade union subscription
You must give the employee this statement at, or before, the time of issuing any pay statement that quotes the total figure of fixed deductions.
Variations in fixed deductions
If there is any change to an employee's fixed deductions, you must give them either:
- notification in writing of the details of the change
- an amended standing statement of fixed deductions, which is then valid for up to 12 months
If a dispute occurs in the workplace between you and your employee, you may wish to seek advice and assistance from the Labour Relations Agency (LRA). The LRA may be able to help with resolving disputes before they escalate into a tribunal claim.
Tribunal claims in relation to pay statements
An employee may complain to an industrial tribunal where you have:
- Failed to give them any kind of pay statement.
- Not included all the required details in an itemised pay statement or standing statement of fixed deductions. As an employer, you can also apply to a tribunal for a decision on what should be included in a pay statement or standing statement.
- Dismissed them for seeking to enforce a right in relation to a pay statement. This right applies regardless of the employee's length of service.
Employees must make their complaint while employed by you or within three months of leaving your employment.
An industrial tribunal cannot deal with a question that is only about the accuracy of an amount in a statement.
Compensation for claims in relation to pay statements
A tribunal may award an employee compensation at its discretion if it finds that you made un-notified deductions of pay, ie deductions that did not appear on a pay statement or a standing statement.
The discretionary amount awarded will not exceed the total of the un-notified deductions during the 13 weeks immediately before the date the employee made their application to the tribunal.
All un-notified deductions enter into this calculation, whether or not they were made in breach of a contract of employment.
Arbitration services
The LRA provides an alternative to the Industrial Tribunal under the Labour Relations Agency Arbitration Scheme. Under the Scheme claimants and respondents can choose to refer a claim to an arbitrator to decide instead of going to a tribunal. The arbitrator's decision is binding as a matter of law and has the same effect as a tribunal.
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Statutory payments
Employee entitlement to statutory payments.
An individual may be entitled to a statutory payment if they:
- become a parent, including through adoption
- are off work due to illness
- are laid-off
- to deal with issues related to domestic abuse
To qualify for statutory payments, the individual must be an employed earner, ie someone working for an employer who is liable to pay secondary Class 1 National Insurance contributions on their wages or salary.
Statutory pay for parents
To be eligible for statutory maternity, statutory paternity, statutory adoption, statutory parental bereavement, or shared parental leave and pay, the individual must:
- meet certain qualifying criteria relating to minimum earnings, continuous employment, and - in paternity and adoption cases - their relationship with the child and the biological mother/other adoptive parent
- comply with certain notification rules
Statutory sick pay
Under certain conditions, you may have to pay statutory sick pay to an employee.
This is the minimum level of payment you must make to someone who is off work through illness. Their contract with you may also entitle them to more than this.
New pending legislation - Statutory Safe Leave
The passing into law of the Domestic Abuse (Safe Leave) Act (Northern Ireland 2022 will mean that employers in Northern Ireland will have the duty to offer at least 10 days of paid leave for victims of domestic abuse each leave year for the purposes of dealing with issues related to domestic abuse.
Although the commencement date of the legislation is yet to be confirmed, employers can take steps within their businesses to prepare for it by creating an environment where employees feel safe to disclose that they are experiencing domestic abuse. See workplace policy on domestic and sexual abuse.
Statutory payments: further information
Find out more about qualifying for:
- Maternity leave and pay
- Adoption leave and pay
- Paternity leave and pay
- Statutory sick pay and leave
- Shared parental leave and pay
- Parental Bereavement Leave and Pay
You can also call the HMRC Employer Helpline on Tel 0300 200 3200.
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Guarantee pay: employee entitlement
What guarantee pay is and who is eligible for it.
You may have to pay your employees a guarantee payment if you cannot provide them with employment on a day when they would normally work for you under their contract of employment.
This is to compensate for the loss, through no fault of their own, of what they would have earned in normal circumstances.
Entitlement to guarantee pay
Individuals are entitled to guarantee pay if they meet the following conditions:
- they are an employee, ie they are working under a contract of employment - see employment status
- they are not an excluded employee, as defined below
- they have worked for at least one month's continuing employment up to the day before the one that guarantee payment is being claimed for
- they have normal working hours and are normally required to work in accordance with their contract of employment
- the day they claim for is not a day they were on holiday, were sick, or not required to work under the contract of employment
- they must not have worked at all on what would be a normal working day (a day being the 24-hour period from midnight to midnight)
- the absence of work was not caused by industrial action, involving any of your other employees or employees working for your subsidiary or parent company
- the reason they did not work is because there was a recession in the employer's business or anything else disrupted the normal working of the employer's business, for example, a natural disaster or failing power supply
- they have not unreasonably refused an offer from you of suitable alternative work - this can be work other than what they normally do
- they have complied with any reasonable requirements imposed by you to ensure their services are available
Excluded employees
You do not have to pay guarantee pay to excluded employees. These are:
- masters and crew members involved in share fishing who are paid solely by a share in the profits or gross earnings of a fishing vessel
- members of the police service and armed forces
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How to calculate guarantee pay
How to work out the amount of guarantee pay you must pay your staff and what the exceptions are.
To calculate guarantee pay, multiply the number of hours your employee would normally have worked on the day in question (as stated in their terms and conditions of employment) by their hourly rate.
Statutory guarantee pay is subject to an upper limit of £38 per day. This amount changes every year. Statutory entitlement is limited to five days in any three-month period. This entitlement is reduced pro rata for employees who work fewer than five days a week.
You do not have to pay guarantee pay for voluntary overtime.
Exemptions from the statutory guarantee pay provisions
The Department for the Economy can grant an exemption from the statutory provisions if you have your own collective agreement. For this agreement to be valid, all parties to the agreement must be making the application for exemption, ie you and your employee, and the guarantee payment must be as favourable overall to your employees as the statutory provisions.
The agreement must also provide a complaints procedure that either includes a right to independent arbitration in the event of a deadlock or specifies that your employee may complain to an industrial tribunal - in which case the tribunal would have jurisdiction over the agreement.
The Employment Rights (NI Order) 1996 also provides for an exemption being granted by the Department of Agriculture, Environment & Rural Affairs (DAERA) where there is an Agricultural wages order under which employees to whom the order relates have a right to guaranteed remuneration.
You do not have to pay statutory guarantee pay on top of any contractual entitlement.
Employment protection rights
It is unlawful to dismiss an employee for seeking guarantee pay.
It is also unlawful not to pay guarantee pay to an employee if they are entitled to it.
In both of these cases, the employee can complain to an industrial tribunal.
Arbitration services
The Labour Relations Agency (LRA) provides an alternative to the Industrial Tribunal under the Labour Relations Agency Arbitration Scheme. Under the Arbitration Scheme claimants and respondents can choose to refer a claim to an arbitrator to decide instead of going to a tribunal. The arbitrator's decision is binding as a matter of law and has the same effect as a tribunal.
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Paying the National Minimum Wage and National Living Wage
You must ensure you pay your workers at least the National Minimum Wage or National Living Wage depending on their eligibility.
Most workers who are above compulsory school age must be paid at least the National Minimum Wage or National Living Wage.
The rate you must pay varies depending on the worker's circumstances.
To find out how to calculate a worker's pay for the purpose of comparing it to the appropriate minimum wage rate, see National Minimum Wage and National Living Wage - calculating minimum wage pay.
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Paying workers holiday pay
Employees' entitlement to paid annual leave.
A worker is entitled to take at least 5.6 weeks paid annual leave.
This is equivalent to, for example:
- 28 days for those who work five days a week
- 16.8 days for those who work 3 days a week
Bank and public holidays
The minimum paid annual leave entitlement can include bank and public holidays.
Workers have no statutory right to take a day's leave on any bank or public holiday or to higher rates of pay if they work on such days.
You must set out in an employee's written statement of employment their holiday entitlement, including arrangements for bank and public holidays, and holiday pay.
Carrying over annual leave
Workers must take at least four weeks' annual leave. Any additional leave may be carried over to the following leave year where this is agreed by you and your worker.
Payment in lieu of annual leave
The only time you can make a payment in lieu of any outstanding holiday is when a worker's employment ends.
Rates of holiday pay
The rate of holiday pay is generally the normal rate for the worker. So for those workers who are paid monthly, their annual salary is divided into 12 equal payments and when they take a holiday it has no effect on their pay slip.
Case law has determined that guaranteed and non-guaranteed overtime should be considered when calculating a worker's statutory holiday pay. Further, the Court of Appeal in Northern Ireland determined that where voluntary overtime constitutes part of an employee's 'normal working week' - this also may need to be taken into account when calculating holiday pay.
You only have to work out a special payment where your workers have varying pay rates, such as piece work. In those cases, the holiday pay will be equal to the average rate over the 12 weeks before the holiday.
Any week in which no pay was due should be replaced by the last previous week in which pay was received to bring the total to twelve.
This only applies to the statutory holiday periods. If you offer extra leave over and above the 5.6 weeks (including bank and public holidays) the rate of pay for these can be whatever is agreed with your employees.
Rolled-up holiday pay
It is unlawful not to pay a worker while they are on holiday and instead include an amount for holiday pay in the hourly rate of pay - something known as 'rolled-up holiday pay'.
You must always pay a worker their normal pay while they are actually taking their leave.
No fixed hours
If your workers do casual work with no normal hours, for example, on a zero-hours contract, the holiday pay of each worker will be based on the average pay they got over the previous 12 weeks.
These should be weeks in which they were paid. If they were not paid in one of those 12 weeks, because they did not work, the last paid week before that should be used to calculate their holiday pay.
Term-time or part-year workers
Recent case law has determined workers employed on a continuous contract throughout the year, and who work for varying hours during certain weeks of the year, such as those who work only term-time, are entitled to 5.6 weeks of leave each year. This entitlement applies regardless of the fact that there are some weeks in the year when they do not work.
In such instances holiday pay is calculated by averaging the pay received during the 12 weeks prior to the commencement of their leave. If there are weeks during the 12-week period where no pay was received, these weeks are disregarded and the employer must count back to include a total of 12 weeks in which pay was received.
Although there may be times when a part-year worker receives a higher payment than a full-time worker - this is compliant with the Part-Time Workers (Prevention of Less favourable Treatment) Regulations (Northern Ireland) 2000, as the part-time worker is not being treated less favourably. There is no legislative provision to prevent part-time workers from being treated more favourably.
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Making deductions from a worker's pay
Legally required deductions such as National Insurance and income tax.
You must not make deductions from a worker's pay unless:
- they are legally authorised, eg PAYE (Pay As You Earn) income tax, National Insurance contributions, deductions from earnings orders, student loan repayments
- they are allowed by the worker's contract - workers must have a copy of the relevant contractual term or a written explanation before you make the deduction
- they have agreed to the deduction in writing before the deduction was made
You don't always have to meet these conditions, for example, when:
- you make deductions to refund an overpayment of wages or expenses
- the worker is on strike
- the deduction is to satisfy a court order, eg to recover debts
Deductions for child maintenance
The Child Maintenance Service (CMS) of the Department for Communities (DfC) may ask you to make deductions from an employee's pay for child maintenance purposes. They may issue you with a deduction from the earnings order and ask you to establish a regular pattern of payments. See how to make child maintenance deductions from an employee's pay.
Direct Earnings Attachments
You may be asked as an employer to deduct benefit overpayments, including social fund loans, that an employee owes the Department for Communities (DfC) from their pay. Read more on Direct Earnings Attachments: making deductions from an employee's pay.
Deductions from the wages of retail workers
If your workers do retail work, you may make deductions from wages to recover cash shortages or stock deficiencies only if, in addition to meeting the above conditions, you:
- inform the worker, in writing, of the total shortfall you are recovering before you make the deduction
- issue a written demand on a payday for the repayment
- make the deduction - or the first in a series - no sooner than their first payday after telling them of the shortfall or, if you tell them on a payday, not before that day
- do not deduct more than one-tenth of the worker's gross pay on any given payday - you can recover any remaining shortfall on future paydays (note that one-tenth of gross pay does not apply when making the final payment on termination of employment)
- make the first deduction within 12 months of discovering the shortage
You should ensure that any deductions for shortages or stock deficiencies are not made unless you have conducted a thorough investigation to establish that the employee is liable for these. You should also take care when making any deductions not to breach minimum wage, as deductions must not reduce your employee's pay below the current minimum wage rate.
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Direct Earnings Attachments (DEA): making deductions from an employee's salary
The Department for Communities will write to you if you need to make DEA deductions for an employee.
Difficulty repaying a benefit or Welfare Supplementary Payment overpayment, Social Fund, or Discretionary Support Loan?
If your employee is having difficulty repaying their benefit overpayment, Social Fund, or Discretionary Support loan, they should act as soon as possible. Even if they have contacted the Department for Communities (DfC) before, they can get in touch to ask them to consider reducing the amount they repay.
If an employee is struggling financially or knows their repayments are no longer affordable, they can ask for them to be reduced by contacting Debt Management.
Further information is also available on financial support and advice from DfC.
As an employer, you may be asked to make deductions from an employee's pay towards benefit overpayments and Social Fund loans that the employee owes to the Department for Communities (DfC). This method of recovery is known as a Direct Earnings Attachment or DEA.
The DfC Debt Management will write to you with an instruction to set up and maintain a DEA if any of your employees are affected.
How a DEA works
Any instruction you receive from the DfC will state the total amount to be recovered from the employee's salary. It is important to note that this is the total amount owed to the DfC and not a deduction amount which must be calculated as a percentage of net earnings. To operate the DEA, you will need to take the following steps:
- for each salary cycle, calculate how much to deduct from your employee's salary
- check if your employee has other debt orders to pay and if they take priority over a DEA
- advise your employee that money will be deducted from their salary in respect of monies owed to the DfC
- deduct the money from your employee's salary
- pay the money to DfC no later than the 19th day of the month following deduction in your payroll
- continue to make employee deductions and payments to the DfC until the total amount stated in the instruction has been repaid or the DfC tells you to stop
Record keeping for DEA
You must keep a record of deductions and tell the DfC when an employee leaves your company.
You could be fined up to £1,000 if you don't make DEA deductions when requested to.
Download Direct Earnings Attachment employer guidance (PDF, 1.0MB).
Employer help with DEA or payments
You can also call the employer helpline if you have questions about how to run a DEA or pay the DfC:
Employer Helpline
0800 587 1322 (Monday to Friday, 9am to 4pm)
Calculating the DEA deduction
There are two deduction percentage rates which may be used for calculation - Standard Rate and Higher Rate.
The instruction from DfC Debt Management will let you know which of these rates to apply. The rate may change throughout the life of the DEA, from Standard to Higher and vice versa, and you will be notified of this by letter.
To calculate the deductions from your employee's salary, for each salary cycle you'll have to:
- work out the employee's earnings after tax, class 1 National Insurance, and workplace pension contributions (net earnings)
- check if the employee has other debt orders and if they take priority over a DEA
- use the tables below (standard or higher) to establish the appropriate percentage deduction rate
- multiply the net earnings figure by the percentage rate to calculate the DEA amount
Note: if you are calculating a DEA based on a daily rate, you must also multiply the daily rate figure by the number of days in the pay period.
If payments are made every two or four weeks, calculate weekly pay and deduct the percentage in the table.
If the total of all deductions is more than 40% of the employee's net earnings, the DEA must be adjusted.
Deductions from earnings rate
AMOUNT OF NET EARNINGS
(Net earnings are gross pay, less income tax, Class 1 National Insurance, and superannuation contributions)
Deduction from Earnings Rate
(Standard)
Rate to apply (% of net earnings)
Deduction from Earnings Rate
(Higher)
Rate to apply (% of net earnings)
Daily Earnings
Weekly Earnings
Monthly Earnings
Up to £15
Up to £100
Up to £430
Nil
5% Between £15.01 and £23
Between £100.01 and £160
Between £430.01 and £690
3%
6% Between £23.01 and £32
Between £160.01 and £220
Between £690.01 and £950
5%
10% Between £32.01 and £39
Between £220.01 and £270
Between £950.01 and £1,160
7%
14% Between £39.01 and £54
Between £270.01 and £375
Between £1,160.01 and £1,615
11%
22% Between £54.01 and £75
Between £375.01 and £520
Between £1,615.01 and £2,240
15%
30% £75.01 or more
£520.01 or more
£2,240.01 or more
20%
40%
What counts as earnings?
When calculating DEA payments, you should include as earnings:
- wages and salary
- fees
- bonuses
- commission
- overtime pay
- occupational pensions if paid with wages or salary
- compensation payments
- Statutory Sick Pay
- most other payments on top of wages
- pay in lieu of notice
Don't count:
- Statutory Maternity Pay
- Statutory Adoption Pay
- Ordinary or Additional Paternity Pay
- guaranteed minimum pension
- any money that the employee gets from the Government e.g. benefits, pensions or credits
- Statutory Redundancy Pay
- expenses
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Direct Earnings Attachment (DEA) payment schedule
The supporting payment schedule for a DEA that must be completed and issued in order to ensure that the correct payment is allocated to the correct debtor account.
The Department for Communities (DfC) requires that a supporting payment schedule for Direct Earnings Attachment (DEA) be completed and issued in order to ensure that the correct payment is allocated to the correct debtor account. This schedule is only required if you are making one overall payment in respect of several employees. However, if you are making a single DEA payment by cheque, you must send a payment schedule.
For a single DEA payment, please ensure that you include your employee's National Insurance number and not their name.
DfC Debt Management has introduced an email route to receive payment schedules from employers, this is the preferred way for payment schedules to be sent.
DEA payment schedule template
Download the payment schedule template for DEA (XLSX, 82K).
For data security reasons the data required for the email payment schedule is slightly different to that on the paper schedule. By restricting the data recorded on the email payment schedule DfC Debt Management will still have enough information to correctly allocate payments to our customer records, whilst minimising the risk of personal data being fraudulently used should the email fall into the hands of a third party. Schedules do not need to be encrypted before emailing.
The postal route for sending payment schedules remains in place and a schedule template for use when forwarding schedules is available in appendix 2 of the DEA: a guide for employers (PDF, 1.0MB).
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Calculate final pay when a worker leaves
Deductions to make from outstanding pay owed when an employee leaves the business.
When a worker leaves your employment, you must give them:
- any outstanding pay, including overtime
- pay in lieu for any untaken holiday
- bonus payments, if earned
- any statutory sick pay, if they are entitled to it
- pay instead of notice if you do not require them to work their notice period - note that the contract of employment must provide for this, otherwise the employee must agree to it
- redundancy payment, if due
If the worker leaves before or during their statutory maternity or adoption pay period, you must also start paying - or continue to pay - them statutory maternity or adoption pay.
You could also give them:
- a pension refund, depending on the rules of the scheme
- a lump-sum payment as compensation for loss of their job
- an enhanced redundancy payment if you have made them redundant - this might be either contractual or paid on a discretionary, and non-discriminatory, case-by-case basis
What you should deduct from a worker's final pay
You must deduct the following items from what you owe the worker:
- income tax
- relevant National Insurance contributions
You might also need to consider deductions in respect of matters such as:
- money given for season ticket loans
- any other outstanding loans
- amounts to be paid under any car leasing agreements
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Paying workers holiday pay
In this guide:
- Staff pay
- What counts as pay?
- Issue pay slips to employees
- Statutory payments
- Guarantee pay: employee entitlement
- How to calculate guarantee pay
- Paying the National Minimum Wage and National Living Wage
- Paying workers holiday pay
- Making deductions from a worker's pay
- Direct Earnings Attachments (DEA): making deductions from an employee's salary
- Direct Earnings Attachment (DEA) payment schedule
- Calculate final pay when a worker leaves
What counts as pay?
Understand what counts as pay and what doesn't when paying a worker.
What is included as pay?
The following counts as pay:
- fees
- bonuses and commission
- holiday pay
- statutory payments, eg statutory sick, maternity, paternity, shared parental pay, adoption pay and parental bereavement pay
- overtime
- notice pay
What does not count as pay?
Pay does not include:
- loans to the worker
- refunds for expenses
- redundancy payments
- tips paid directly to the worker
- employer contributions to a pension scheme
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Issue pay slips to employees
Obligations for employers to issue itemised pay statements and penalties for not giving notice of variations in fixed deductions in staff pay.
As an employer, you are legally obliged to give each employee a written itemised pay statement, usually known as a payslip or wage slip. You must issue it at, or before, the time you pay your employee.
This right to receive an itemised pay statement does not apply to:
- people you pay who are not employees, eg freelancers and contractors
- certain other groups, including police and some people who work at sea
Pay slip: what you must include
An itemised pay statement or pay slip must show:
- gross wages or salary before deductions
- any fixed deductions - and the reasons for taking them - or the total figure for fixed deductions when you have provided a separate standing statement of the details
- any variable deductions - and the reasons for taking them
- net wages or salary payable after deductions
- a breakdown of each part-payment - such as part by cheque, part in cash
Standing statements of fixed deductions from pay
A pay statement does not have to include the amount and purpose of every separate fixed deduction every time.
However, if you don't issue a payslip that does this, you must give the employee a standing written statement of fixed deductions at least once every 12 months.
This must state for each item deducted:
- the amount
- the intervals at which the deduction is made
- the purpose or description, eg trade union subscription
You must give the employee this statement at, or before, the time of issuing any pay statement that quotes the total figure of fixed deductions.
Variations in fixed deductions
If there is any change to an employee's fixed deductions, you must give them either:
- notification in writing of the details of the change
- an amended standing statement of fixed deductions, which is then valid for up to 12 months
If a dispute occurs in the workplace between you and your employee, you may wish to seek advice and assistance from the Labour Relations Agency (LRA). The LRA may be able to help with resolving disputes before they escalate into a tribunal claim.
Tribunal claims in relation to pay statements
An employee may complain to an industrial tribunal where you have:
- Failed to give them any kind of pay statement.
- Not included all the required details in an itemised pay statement or standing statement of fixed deductions. As an employer, you can also apply to a tribunal for a decision on what should be included in a pay statement or standing statement.
- Dismissed them for seeking to enforce a right in relation to a pay statement. This right applies regardless of the employee's length of service.
Employees must make their complaint while employed by you or within three months of leaving your employment.
An industrial tribunal cannot deal with a question that is only about the accuracy of an amount in a statement.
Compensation for claims in relation to pay statements
A tribunal may award an employee compensation at its discretion if it finds that you made un-notified deductions of pay, ie deductions that did not appear on a pay statement or a standing statement.
The discretionary amount awarded will not exceed the total of the un-notified deductions during the 13 weeks immediately before the date the employee made their application to the tribunal.
All un-notified deductions enter into this calculation, whether or not they were made in breach of a contract of employment.
Arbitration services
The LRA provides an alternative to the Industrial Tribunal under the Labour Relations Agency Arbitration Scheme. Under the Scheme claimants and respondents can choose to refer a claim to an arbitrator to decide instead of going to a tribunal. The arbitrator's decision is binding as a matter of law and has the same effect as a tribunal.
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Statutory payments
Employee entitlement to statutory payments.
An individual may be entitled to a statutory payment if they:
- become a parent, including through adoption
- are off work due to illness
- are laid-off
- to deal with issues related to domestic abuse
To qualify for statutory payments, the individual must be an employed earner, ie someone working for an employer who is liable to pay secondary Class 1 National Insurance contributions on their wages or salary.
Statutory pay for parents
To be eligible for statutory maternity, statutory paternity, statutory adoption, statutory parental bereavement, or shared parental leave and pay, the individual must:
- meet certain qualifying criteria relating to minimum earnings, continuous employment, and - in paternity and adoption cases - their relationship with the child and the biological mother/other adoptive parent
- comply with certain notification rules
Statutory sick pay
Under certain conditions, you may have to pay statutory sick pay to an employee.
This is the minimum level of payment you must make to someone who is off work through illness. Their contract with you may also entitle them to more than this.
New pending legislation - Statutory Safe Leave
The passing into law of the Domestic Abuse (Safe Leave) Act (Northern Ireland 2022 will mean that employers in Northern Ireland will have the duty to offer at least 10 days of paid leave for victims of domestic abuse each leave year for the purposes of dealing with issues related to domestic abuse.
Although the commencement date of the legislation is yet to be confirmed, employers can take steps within their businesses to prepare for it by creating an environment where employees feel safe to disclose that they are experiencing domestic abuse. See workplace policy on domestic and sexual abuse.
Statutory payments: further information
Find out more about qualifying for:
- Maternity leave and pay
- Adoption leave and pay
- Paternity leave and pay
- Statutory sick pay and leave
- Shared parental leave and pay
- Parental Bereavement Leave and Pay
You can also call the HMRC Employer Helpline on Tel 0300 200 3200.
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Guarantee pay: employee entitlement
What guarantee pay is and who is eligible for it.
You may have to pay your employees a guarantee payment if you cannot provide them with employment on a day when they would normally work for you under their contract of employment.
This is to compensate for the loss, through no fault of their own, of what they would have earned in normal circumstances.
Entitlement to guarantee pay
Individuals are entitled to guarantee pay if they meet the following conditions:
- they are an employee, ie they are working under a contract of employment - see employment status
- they are not an excluded employee, as defined below
- they have worked for at least one month's continuing employment up to the day before the one that guarantee payment is being claimed for
- they have normal working hours and are normally required to work in accordance with their contract of employment
- the day they claim for is not a day they were on holiday, were sick, or not required to work under the contract of employment
- they must not have worked at all on what would be a normal working day (a day being the 24-hour period from midnight to midnight)
- the absence of work was not caused by industrial action, involving any of your other employees or employees working for your subsidiary or parent company
- the reason they did not work is because there was a recession in the employer's business or anything else disrupted the normal working of the employer's business, for example, a natural disaster or failing power supply
- they have not unreasonably refused an offer from you of suitable alternative work - this can be work other than what they normally do
- they have complied with any reasonable requirements imposed by you to ensure their services are available
Excluded employees
You do not have to pay guarantee pay to excluded employees. These are:
- masters and crew members involved in share fishing who are paid solely by a share in the profits or gross earnings of a fishing vessel
- members of the police service and armed forces
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How to calculate guarantee pay
How to work out the amount of guarantee pay you must pay your staff and what the exceptions are.
To calculate guarantee pay, multiply the number of hours your employee would normally have worked on the day in question (as stated in their terms and conditions of employment) by their hourly rate.
Statutory guarantee pay is subject to an upper limit of £38 per day. This amount changes every year. Statutory entitlement is limited to five days in any three-month period. This entitlement is reduced pro rata for employees who work fewer than five days a week.
You do not have to pay guarantee pay for voluntary overtime.
Exemptions from the statutory guarantee pay provisions
The Department for the Economy can grant an exemption from the statutory provisions if you have your own collective agreement. For this agreement to be valid, all parties to the agreement must be making the application for exemption, ie you and your employee, and the guarantee payment must be as favourable overall to your employees as the statutory provisions.
The agreement must also provide a complaints procedure that either includes a right to independent arbitration in the event of a deadlock or specifies that your employee may complain to an industrial tribunal - in which case the tribunal would have jurisdiction over the agreement.
The Employment Rights (NI Order) 1996 also provides for an exemption being granted by the Department of Agriculture, Environment & Rural Affairs (DAERA) where there is an Agricultural wages order under which employees to whom the order relates have a right to guaranteed remuneration.
You do not have to pay statutory guarantee pay on top of any contractual entitlement.
Employment protection rights
It is unlawful to dismiss an employee for seeking guarantee pay.
It is also unlawful not to pay guarantee pay to an employee if they are entitled to it.
In both of these cases, the employee can complain to an industrial tribunal.
Arbitration services
The Labour Relations Agency (LRA) provides an alternative to the Industrial Tribunal under the Labour Relations Agency Arbitration Scheme. Under the Arbitration Scheme claimants and respondents can choose to refer a claim to an arbitrator to decide instead of going to a tribunal. The arbitrator's decision is binding as a matter of law and has the same effect as a tribunal.
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Paying the National Minimum Wage and National Living Wage
You must ensure you pay your workers at least the National Minimum Wage or National Living Wage depending on their eligibility.
Most workers who are above compulsory school age must be paid at least the National Minimum Wage or National Living Wage.
The rate you must pay varies depending on the worker's circumstances.
To find out how to calculate a worker's pay for the purpose of comparing it to the appropriate minimum wage rate, see National Minimum Wage and National Living Wage - calculating minimum wage pay.
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Paying workers holiday pay
Employees' entitlement to paid annual leave.
A worker is entitled to take at least 5.6 weeks paid annual leave.
This is equivalent to, for example:
- 28 days for those who work five days a week
- 16.8 days for those who work 3 days a week
Bank and public holidays
The minimum paid annual leave entitlement can include bank and public holidays.
Workers have no statutory right to take a day's leave on any bank or public holiday or to higher rates of pay if they work on such days.
You must set out in an employee's written statement of employment their holiday entitlement, including arrangements for bank and public holidays, and holiday pay.
Carrying over annual leave
Workers must take at least four weeks' annual leave. Any additional leave may be carried over to the following leave year where this is agreed by you and your worker.
Payment in lieu of annual leave
The only time you can make a payment in lieu of any outstanding holiday is when a worker's employment ends.
Rates of holiday pay
The rate of holiday pay is generally the normal rate for the worker. So for those workers who are paid monthly, their annual salary is divided into 12 equal payments and when they take a holiday it has no effect on their pay slip.
Case law has determined that guaranteed and non-guaranteed overtime should be considered when calculating a worker's statutory holiday pay. Further, the Court of Appeal in Northern Ireland determined that where voluntary overtime constitutes part of an employee's 'normal working week' - this also may need to be taken into account when calculating holiday pay.
You only have to work out a special payment where your workers have varying pay rates, such as piece work. In those cases, the holiday pay will be equal to the average rate over the 12 weeks before the holiday.
Any week in which no pay was due should be replaced by the last previous week in which pay was received to bring the total to twelve.
This only applies to the statutory holiday periods. If you offer extra leave over and above the 5.6 weeks (including bank and public holidays) the rate of pay for these can be whatever is agreed with your employees.
Rolled-up holiday pay
It is unlawful not to pay a worker while they are on holiday and instead include an amount for holiday pay in the hourly rate of pay - something known as 'rolled-up holiday pay'.
You must always pay a worker their normal pay while they are actually taking their leave.
No fixed hours
If your workers do casual work with no normal hours, for example, on a zero-hours contract, the holiday pay of each worker will be based on the average pay they got over the previous 12 weeks.
These should be weeks in which they were paid. If they were not paid in one of those 12 weeks, because they did not work, the last paid week before that should be used to calculate their holiday pay.
Term-time or part-year workers
Recent case law has determined workers employed on a continuous contract throughout the year, and who work for varying hours during certain weeks of the year, such as those who work only term-time, are entitled to 5.6 weeks of leave each year. This entitlement applies regardless of the fact that there are some weeks in the year when they do not work.
In such instances holiday pay is calculated by averaging the pay received during the 12 weeks prior to the commencement of their leave. If there are weeks during the 12-week period where no pay was received, these weeks are disregarded and the employer must count back to include a total of 12 weeks in which pay was received.
Although there may be times when a part-year worker receives a higher payment than a full-time worker - this is compliant with the Part-Time Workers (Prevention of Less favourable Treatment) Regulations (Northern Ireland) 2000, as the part-time worker is not being treated less favourably. There is no legislative provision to prevent part-time workers from being treated more favourably.
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Making deductions from a worker's pay
Legally required deductions such as National Insurance and income tax.
You must not make deductions from a worker's pay unless:
- they are legally authorised, eg PAYE (Pay As You Earn) income tax, National Insurance contributions, deductions from earnings orders, student loan repayments
- they are allowed by the worker's contract - workers must have a copy of the relevant contractual term or a written explanation before you make the deduction
- they have agreed to the deduction in writing before the deduction was made
You don't always have to meet these conditions, for example, when:
- you make deductions to refund an overpayment of wages or expenses
- the worker is on strike
- the deduction is to satisfy a court order, eg to recover debts
Deductions for child maintenance
The Child Maintenance Service (CMS) of the Department for Communities (DfC) may ask you to make deductions from an employee's pay for child maintenance purposes. They may issue you with a deduction from the earnings order and ask you to establish a regular pattern of payments. See how to make child maintenance deductions from an employee's pay.
Direct Earnings Attachments
You may be asked as an employer to deduct benefit overpayments, including social fund loans, that an employee owes the Department for Communities (DfC) from their pay. Read more on Direct Earnings Attachments: making deductions from an employee's pay.
Deductions from the wages of retail workers
If your workers do retail work, you may make deductions from wages to recover cash shortages or stock deficiencies only if, in addition to meeting the above conditions, you:
- inform the worker, in writing, of the total shortfall you are recovering before you make the deduction
- issue a written demand on a payday for the repayment
- make the deduction - or the first in a series - no sooner than their first payday after telling them of the shortfall or, if you tell them on a payday, not before that day
- do not deduct more than one-tenth of the worker's gross pay on any given payday - you can recover any remaining shortfall on future paydays (note that one-tenth of gross pay does not apply when making the final payment on termination of employment)
- make the first deduction within 12 months of discovering the shortage
You should ensure that any deductions for shortages or stock deficiencies are not made unless you have conducted a thorough investigation to establish that the employee is liable for these. You should also take care when making any deductions not to breach minimum wage, as deductions must not reduce your employee's pay below the current minimum wage rate.
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Direct Earnings Attachments (DEA): making deductions from an employee's salary
The Department for Communities will write to you if you need to make DEA deductions for an employee.
Difficulty repaying a benefit or Welfare Supplementary Payment overpayment, Social Fund, or Discretionary Support Loan?
If your employee is having difficulty repaying their benefit overpayment, Social Fund, or Discretionary Support loan, they should act as soon as possible. Even if they have contacted the Department for Communities (DfC) before, they can get in touch to ask them to consider reducing the amount they repay.
If an employee is struggling financially or knows their repayments are no longer affordable, they can ask for them to be reduced by contacting Debt Management.
Further information is also available on financial support and advice from DfC.
As an employer, you may be asked to make deductions from an employee's pay towards benefit overpayments and Social Fund loans that the employee owes to the Department for Communities (DfC). This method of recovery is known as a Direct Earnings Attachment or DEA.
The DfC Debt Management will write to you with an instruction to set up and maintain a DEA if any of your employees are affected.
How a DEA works
Any instruction you receive from the DfC will state the total amount to be recovered from the employee's salary. It is important to note that this is the total amount owed to the DfC and not a deduction amount which must be calculated as a percentage of net earnings. To operate the DEA, you will need to take the following steps:
- for each salary cycle, calculate how much to deduct from your employee's salary
- check if your employee has other debt orders to pay and if they take priority over a DEA
- advise your employee that money will be deducted from their salary in respect of monies owed to the DfC
- deduct the money from your employee's salary
- pay the money to DfC no later than the 19th day of the month following deduction in your payroll
- continue to make employee deductions and payments to the DfC until the total amount stated in the instruction has been repaid or the DfC tells you to stop
Record keeping for DEA
You must keep a record of deductions and tell the DfC when an employee leaves your company.
You could be fined up to £1,000 if you don't make DEA deductions when requested to.
Download Direct Earnings Attachment employer guidance (PDF, 1.0MB).
Employer help with DEA or payments
You can also call the employer helpline if you have questions about how to run a DEA or pay the DfC:
Employer Helpline
0800 587 1322 (Monday to Friday, 9am to 4pm)
Calculating the DEA deduction
There are two deduction percentage rates which may be used for calculation - Standard Rate and Higher Rate.
The instruction from DfC Debt Management will let you know which of these rates to apply. The rate may change throughout the life of the DEA, from Standard to Higher and vice versa, and you will be notified of this by letter.
To calculate the deductions from your employee's salary, for each salary cycle you'll have to:
- work out the employee's earnings after tax, class 1 National Insurance, and workplace pension contributions (net earnings)
- check if the employee has other debt orders and if they take priority over a DEA
- use the tables below (standard or higher) to establish the appropriate percentage deduction rate
- multiply the net earnings figure by the percentage rate to calculate the DEA amount
Note: if you are calculating a DEA based on a daily rate, you must also multiply the daily rate figure by the number of days in the pay period.
If payments are made every two or four weeks, calculate weekly pay and deduct the percentage in the table.
If the total of all deductions is more than 40% of the employee's net earnings, the DEA must be adjusted.
Deductions from earnings rate
AMOUNT OF NET EARNINGS
(Net earnings are gross pay, less income tax, Class 1 National Insurance, and superannuation contributions)
Deduction from Earnings Rate
(Standard)
Rate to apply (% of net earnings)
Deduction from Earnings Rate
(Higher)
Rate to apply (% of net earnings)
Daily Earnings
Weekly Earnings
Monthly Earnings
Up to £15
Up to £100
Up to £430
Nil
5% Between £15.01 and £23
Between £100.01 and £160
Between £430.01 and £690
3%
6% Between £23.01 and £32
Between £160.01 and £220
Between £690.01 and £950
5%
10% Between £32.01 and £39
Between £220.01 and £270
Between £950.01 and £1,160
7%
14% Between £39.01 and £54
Between £270.01 and £375
Between £1,160.01 and £1,615
11%
22% Between £54.01 and £75
Between £375.01 and £520
Between £1,615.01 and £2,240
15%
30% £75.01 or more
£520.01 or more
£2,240.01 or more
20%
40%
What counts as earnings?
When calculating DEA payments, you should include as earnings:
- wages and salary
- fees
- bonuses
- commission
- overtime pay
- occupational pensions if paid with wages or salary
- compensation payments
- Statutory Sick Pay
- most other payments on top of wages
- pay in lieu of notice
Don't count:
- Statutory Maternity Pay
- Statutory Adoption Pay
- Ordinary or Additional Paternity Pay
- guaranteed minimum pension
- any money that the employee gets from the Government e.g. benefits, pensions or credits
- Statutory Redundancy Pay
- expenses
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Direct Earnings Attachment (DEA) payment schedule
The supporting payment schedule for a DEA that must be completed and issued in order to ensure that the correct payment is allocated to the correct debtor account.
The Department for Communities (DfC) requires that a supporting payment schedule for Direct Earnings Attachment (DEA) be completed and issued in order to ensure that the correct payment is allocated to the correct debtor account. This schedule is only required if you are making one overall payment in respect of several employees. However, if you are making a single DEA payment by cheque, you must send a payment schedule.
For a single DEA payment, please ensure that you include your employee's National Insurance number and not their name.
DfC Debt Management has introduced an email route to receive payment schedules from employers, this is the preferred way for payment schedules to be sent.
DEA payment schedule template
Download the payment schedule template for DEA (XLSX, 82K).
For data security reasons the data required for the email payment schedule is slightly different to that on the paper schedule. By restricting the data recorded on the email payment schedule DfC Debt Management will still have enough information to correctly allocate payments to our customer records, whilst minimising the risk of personal data being fraudulently used should the email fall into the hands of a third party. Schedules do not need to be encrypted before emailing.
The postal route for sending payment schedules remains in place and a schedule template for use when forwarding schedules is available in appendix 2 of the DEA: a guide for employers (PDF, 1.0MB).
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Calculate final pay when a worker leaves
Deductions to make from outstanding pay owed when an employee leaves the business.
When a worker leaves your employment, you must give them:
- any outstanding pay, including overtime
- pay in lieu for any untaken holiday
- bonus payments, if earned
- any statutory sick pay, if they are entitled to it
- pay instead of notice if you do not require them to work their notice period - note that the contract of employment must provide for this, otherwise the employee must agree to it
- redundancy payment, if due
If the worker leaves before or during their statutory maternity or adoption pay period, you must also start paying - or continue to pay - them statutory maternity or adoption pay.
You could also give them:
- a pension refund, depending on the rules of the scheme
- a lump-sum payment as compensation for loss of their job
- an enhanced redundancy payment if you have made them redundant - this might be either contractual or paid on a discretionary, and non-discriminatory, case-by-case basis
What you should deduct from a worker's final pay
You must deduct the following items from what you owe the worker:
- income tax
- relevant National Insurance contributions
You might also need to consider deductions in respect of matters such as:
- money given for season ticket loans
- any other outstanding loans
- amounts to be paid under any car leasing agreements
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