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Conducting industrial action ballots

Industrial disputes

In this guide:

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 mediation explained.

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.

See lawful industrial action.

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.

See lawful industrial action.

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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Employment Agency Inspectorate: compliance and enforcement

Employment agencies and employment businesses: record keeping

In this guide:

Employment agencies and employment businesses: keeping work-seekers' records

Guidance on the types of records employment agencies and employment businesses need to keep in relation to work-seekers.
There are certain records you must keep when running an employment agency or business about applications from work-seekers.

However, you are not required to keep the details of a work-seeker if you take no action to find them work. For example, if you receive a high volume of speculative CVs, which are not used, records need not be retained on each work-seeker whose CV is not used.

Records data you must keep

You must keep the following records on work-seekers you find, or attempt to find, work for:

the date their application was received

their name, address, and, if under 22 years old, their date of birth as well

any terms which apply, or will apply, between the agency or employment business and the work-seeker

any document recording variation to the terms between the employment agency or business

details of their training, experience, qualifications, and any authorisation to undertake particular work (and copies of any documents provided to you relating to this)

details of any requirements specified by the work-seeker in relation to taking up employment

names of hirers to whom the work-seeker is introduced or supplied

details of any resulting engagement and the date from which it takes effect

a copy of any contract between the work-seeker and a hirer that you entered into on the work-seekers behalf

the date any applications are withdrawn or contracts are terminated

details of enquires about the work-seeker and the position concerned - with copies of all relevant documents and dates they were received or sent

Charging fees and records you must keep

If you are permitted to charge fees to work-seekers (ie agencies in the entertainment sector), you should also keep records of either:

the dates of requests for fees from the work-seeker and receipts of fees or payments, with copy statements or invoices, numbers, and amounts, or

statements of dates and amounts of sums deducted from the money you received on the work-seekers behalf when you operated a 'client account' to hold the work-seekers money
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Employment agencies and businesses: keeping hiring company records

Records that must be kept by employment agencies or employment businesses in contact with companies hiring new staff.
There are certain records you must keep when running an employment agency or business about any companies hiring staff who contact you with job vacancies.

Records you must keep when dealing with companies hiring staff

The date their application is received.

The hiring company's name and address, and the location of employment they are offering if different.

Details of the job role or roles the hirer seeks to fill.

Duration or likely duration of the job role.

Experience, training, ability, qualifications, and authorisation are required either by the hiring company, by law, or by any professional body.

The terms offered in respect of the job role or roles the hirer seeks to fill.

Any other conditions attached to the job role or roles the hirer seeks to fill.

Copy of the terms between the employment agency or business and the hiring company, and any document recording any variation on these terms.

Names of job-seekers introduced to or supplied to the hiring company.

Details of inquiries about the hiring company and the position the hirer seeks to fill, with copies of all relevant documents and dates of their receipt.

Details of each resulting engagement and the date from which it takes effect.

Dates of requests by the employment agency or business for fees or other payment from the hiring company and of receipt of such fees or other payments, and copies of statements or invoices.
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Keeping records for multiple employment agencies

The records that must be kept when dealing with more than one employment agency or employment business.
There are certain records you must keep when running an employment agency or business when more than one employment agency or employment business is involved with the work-seeker or hirer.

Records you must keep: multiple employment agencies

names of any other agencies or employment businesses whose services the agency or employment business uses

details of enquiries about that agency or employment business's suitability, with copies of all relevant documents and dates the enquiries were made and the answers received

date and copy of any agreement with the other agency
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How long to store employment agency and business records

The length of time employment agency and employment business records must be kept for.

All the records relating to either work-seekers, hirers or situations where more than one employment agency or business is involved must be kept for at least one year after their creation.

Records relating to applications from hirers and work-seekers must be retained for at least one year following the date that the agency or employment business last provided its services to that work-seeker or hirer.

If you run a modelling or entertainment agency, client account records must be kept for a minimum of six years. For further information see entertainment and modelling agencies.

You can keep records at the premises where you trade or elsewhere. You must make sure they are readily accessible and can be delivered to the trading premises to which they relate - ie the premises at which the work-seeker/hirer is registered or employed, or premises you carry out the business with any other employment agency or employment business.

If a request for records is made by an Employment Agency Inspectorate inspector they must be delivered no later than the end of the second business day following the day the request for them is made. For example, if a request for records is made on a Monday, you must be able to deliver them by the end of Wednesday.

Records can be kept in electronic form provided they are capable of being reproduced in a legible form.

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Employment Agency Inspectorate: compliance and enforcement

The role of the Employment Agency Inspectorate in ensuring employment agencies and businesses comply with the law.

The Department for the Economy's Employment Agency Inspectorate (EAI) is responsible for regulating the conduct of employment agencies and employment businesses in Northern Ireland.

The EAI's main way to check that employment agencies and businesses are complying with the law is by sending inspectors to visit the agency or business and carry out an inspection.

EAI inspectors investigate complaints, follow up allegations of misconduct, and undertake targeted checks of employment agencies and businesses.

All EAI inspectors carry official identification. They are able to enter domestic or commercial premises that they have reason to believe are used, or have been used, for the purposes of an employment agency or business. They have powers to inspect those premises and any records or documents necessary to ensure compliance with The Employment (Miscellaneous Provisions) (Northern Ireland) Order 1981 (as amended) and The Conduct of Employment Agencies and Employment Businesses Regulations (Northern Ireland) 2005 (as amended).

Inspectors may require proof to decide whether employment agencies and businesses are complying with their legal obligations. They can specifically request documents and financial records to ensure compliance while they are on the premises. Inspectors may also copy documents, or remove documents for the purposes of copying them or request in writing any record, document, or information be provided to them at a time and place of their choice so avoiding the need to revisit the premises.

For the definitions of an employment business and an employment agency, see employment agencies and employment businesses.

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Employment agencies: penalties for non-compliance

Action that can be taken by the Employment Agency Inspectorate when an employment agency does not comply with its legal duties.

Employment Agency Inspectorate (EAI) inspectors will inform the employment agency or business of instances of non-compliance and explain what their legal requirements are.

If an employment agency or business is not complying with their legal obligations they will be sent an infringement letter detailing the issues which require their attention in order to achieve compliance, and the steps needed to correct them. You will be required to provide evidence that you have addressed the non-compliance issues accordingly. There may be a follow-up inspection by the EAI to ensure that remedial action has been taken.

See EAI legislation and enforcement.

Penalties for serious non-compliance issues

If the matter is particularly serious or the employment agency or business does not take corrective action, the EAI will consider recommending a prosecution and/or making an application for a Prohibition Order in an Industrial tribunal.

Certain breaches of the legislation are criminal offences that can be tried in the Magistrates' Court, where the maximum fine is £5,000 for each offence, or in the Crown Court where the fine is unlimited.

The EAI can make an application to an Industrial Tribunal for a Prohibition Order on account of a person's misconduct or unsuitability. The maximum ban is ten years.

See the EAI enforcement policy.

If you have a question about an EAI inspection or any other related topic, you can call the Employment Agency Inspectorate Helpline on Tel 028 9025 7796 or email eai@economy-ni.gov.uk. They will take note of the points you raise, seek further advice if necessary, and advise appropriately.

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Employment Agency Inspectorate: prosecutions

Steps taken when employment businesses or agencies are prosecuted by the Employment Agency Inspectorate.
The Employment Agency Inspectorate (EAI) can refer cases for prosecution where a person breaches the requirements of the 1981 Order or Conduct Regulations while running an employment agency or employment business.

This can include anyone who:

breaches the ban on charging fees to workers

fails to comply with any of the conduct regulations

makes, causes to be made, or knowingly allows false entries to be made in any record or document that has to be kept under the 1981 Order or Conduct Regulations

doesn't comply with a prohibition order without a reasonable excuse

In addition, any person who obstructs an officer in carrying out their duty will be guilty of an offence and liable to a fine not exceeding £1,000.

Prohibition orders

A prohibition order may either:

prevent a person from running an employment agency or business or any version of these specified in the order

impose conditions under which they may be allowed to run an employment agency or business

Read further guidance on the Employment Agency Inspectorate.
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Whistleblowing: Right of complaint to an industrial tribunal

Dismissing employees

In this guide:

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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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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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 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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Read more about Whistleblowing: Right of complaint to an industrial tribunal

Whistleblowing and dismissal

Dismissing employees

In this guide:

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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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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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 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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Read more about Whistleblowing and dismissal

What happens after a winding-up order is made?

Wind up a limited company that owes you money

In this guide:

What is compulsory winding up?

The legal process of compulsory winding-up orders against insolvent companies through the courts.
In compulsory winding up, a creditor asks the High Court to wind up the affairs of an insolvent limited company. This legal process ends with the company's removal from the Companies House register - effectively ceasing to exist.

Once the order has been made the High Court appoints the Official Receiver (OR) as liquidator. The Official Receiver works for the Insolvency Service and finds out how and why an individual became bankrupt or a company went into compulsory liquidation.

The OR interviews the directors and informs the creditors of the liquidation. If the OR believes the company has enough assets for something to be paid to its creditors the OR will seek the appointment of an insolvency practitioner as liquidator - either by calling a creditors' meeting for the creditors to vote for the liquidator or by asking the Department for the Economy (DfE) to appoint one. If there are no assets the OR will remain liquidator.

Compulsory winding up involves the following:

all the company's contracts - including employee contracts - are completed, transferred or ended

the company ceases to do business

outstanding legal disputes are settled

all of the company's assets are sold

any money owed to the company is collected

any funds are distributed to creditors

surplus funds - after the repayment of all debts - and share capital can be distributed to shareholders

For more information, see insolvency.

Sources of advice

If you are a creditor, it can be expensive to request a compulsory winding-up order, so you should get specialist legal and financial advice before petitioning the Court. Other sources of advice include:

Citizens Advice Northern Ireland

solicitors

accountants

authorised insolvency practitioners

financial advisers

debt advice centres

You will need to instruct a solicitor to handle the winding-up petition. A winding-up petition is heard in the High Court. The High Court may award costs against you if it considers that you have brought the petition inappropriately - eg the company disputes the debt between you.
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How do I wind up a company?

How to petition the High Court or a county court for a winding-up order against a company.
If you are owed money by a company that cannot or will not pay it back, you can apply to the Court for a winding-up order. As part of your petition, you will need to prove to the Court that the company cannot pay its debts.

It can be proved that a company cannot pay its debts if:

a creditor owed over £750 serves the company with a 'statutory demand' - form 4.01 - which the company does not comply with within three weeks

a creditor obtains judgment against the company and execution is unsatisfied (there are not enough assets or funds to clear the debt)

the company cannot pay its debts when they are due

the company's total debts exceed its total assets

Obtaining a judgment

A creditor obtains judgment against the company, it is lodged for enforcement with the Enforcement of Judgments Office and a certificate of unenforceability is issued under Article 19 of the Judgments Enforcement (Northern Ireland) Order 1981.

You must apply to the court if you want to issue a claim for judgment yourself.

Presenting your winding-up petition to the High Court

Winding-up petitions are presented in the Northern Ireland High Court in Belfast.

To contact the High Court, write to:

Northern Ireland High Court
Royal Courts of Justice
Chichester Street
Belfast

Alternatively, you can contact the Northern Ireland Courts and Tribunals Service Enquiry Line on Tel 0300 200 7812.

Find NI Court Service Court contact details and information.
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Completing a winding-up petition

How to complete a winding-up petition for a compulsory winding-up order against a company.
To apply for a compulsory winding-up order against a company, you must pay a deposit to the Department for the Economy (DfE) and you must complete a winding-up petition form 4.02 along with an affidavit (form 4.03) verifying matters giving rise to the petition.

Download winding-up petition form 4.02 (PDF, 97K).

Download affidavit form 4.03 (PDF, 80K).

Access DfE guidance on how to wind up a company that owes you money.

Companies House

You will need details of the company to complete the petition. You can search for company information using the WebCHeck service at Companies House. See find company information using Companies House services.

You can also get company details by calling the Companies House Contact Centre on Tel 0303 1234 500. You may, however, have to pay for some of the information you require.

Grounds for your winding-up petition

The petition will ask you to give your grounds for applying for a winding-up order, as well as other relevant information:

where you have written a letter to the company to ask for your money, you should say what the debt was owed for, the amount you asked for in the letter and the date of the letter

if you sent an invoice that was not paid, you should say what the debt was for, the amount you requested, and the date of the invoice

if you are giving details of a certificate of unenforceability, you should include the date of the judgment, the High Court information and the case number

if you sent a statutory demand for your money, you should give details of the amount you demanded, the date it was served on the registered office, and proof that at least three weeks have passed since it was served

Your grounds for petitioning should always include a statement that the company has not paid the debt, or an agreed proportion of it. You should also say if the company has been struck off, and give the date.

European Community Regulation on insolvency proceedings

In your winding-up petition, you must say whether or not the European Community (EC) Regulation on insolvency proceedings 2000 applies. There are three types of proceedings: 'main', 'secondary' and 'territorial':

Main proceedings - can be opened only in a European Union member state where the debtor company has its 'centre of main interests'.

Secondary proceedings - can be opened in a member state where the debtor company has an establishment. Secondary proceedings apply only to assets located in that state.

Territorial proceedings - can be opened before main proceedings, but only by creditors of a company's establishment in the same country. These proceedings can also be used where main proceedings cannot be opened because the company has its main interests in a country with laws which disallow it.

Companies House provide information on cross-border insolvency proceedings.

If the company is registered in Northern Ireland and mainly carries out business in Northern Ireland, the EC Regulation will apply and the proceedings will be main proceedings. In other circumstances you should seek more legal advice.
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Steps to serve a winding-up petition

How to present a winding-up petition to the court and how to serve a winding-up petition on the debtor company.
When you have completed your winding-up petition you must present it to the Court. You do this by sending these documents:

the original winding-up petition

three copies of the petition - or four if the company has been dissolved

the original affidavit

receipt of deposit for £1165 paid to the Department for the Economy (DfE)

a Court fee of £186

You will also be responsible for the costs involved in advertising the petition in the Belfast Gazette, using a process server for the service of a statutory demand and the petition and any costs for instructing a solicitor.

Download the DfE guidance on how to wind up a company that owes you money (PDF, 44KB).

If the Court is satisfied with your petition and the other documents, it will seal the petition and all copies, and send copies back to you. These will be marked or endorsed with the date and time they were filed, as well as the date and venue of the Court hearing.

Serving the petition on the debtor company

After the High Court has returned the sealed copies of the petition containing the date and time it was filed and the date and venue of the hearing, you must serve it on the company that owes you money. The petition must be served at the company's registered address - as shown on the public Register held by Companies House - either by you or by a process server company.

To find out more about process servers, see statutory demands.

You can serve a petition at the debtor company's registered office by handing it to:

someone who acknowledges themselves as a director, officer or employee of the company

a person authorised to accept service on the company's behalf

a person who - in the server's opinion - is a director, officer or other employee of the company

If you or your agent cannot find a suitable person at the registered offices, the petition can be served by:

placing it in a letter box

placing it on a table, desk, chair, the floor or a radiator

placing it on a receptionist's desk

After serving the petition

Immediately after service of the petition, the petitioner must file an affidavit at Court, verifying the service of the petition (Form 4.04/4.05).

The certificate of service must be sufficient to identify the petition served and must specify:

the name and registered number of the company

the address of the registered office of the company

the name of the petitioner

the Court in which the petition was filed and the Court reference number

the date of the petition

whether the copy served was a sealed copy

the date on which service was effected

the manner in which service was effected

If you cannot serve the petition by any of the methods listed above, you will need to apply to the High Court for permission to use another route, eg posting it to a director's last-known address. If you do this, you must attach a sealed copy of the order for substituted service to the certificate of service.

Where the company has been dissolved, you must serve the extra copy of the petition to the Crown Solicitor for Northern Ireland. This will enable you to apply for it to be restored to the Register.
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After serving a winding-up petition

What to do after you have served a winding-up petition on a debtor company
After you have served a winding-up petition on a company that owes you money, you must complete forms to:

provide the High Court with evidence that the petition has been served

notify specified parties

advertise the petition in the Belfast Gazette

certify compliance with the winding-up petition procedures

Providing evidence of service (form 4.04/4.05)

Immediately after service of the petition, the petitioner must file an affidavit at the High Court, verifying the service of the petition (Form 4.04/4.05). For details of what this must show see steps to serve a winding-up petition.

Other people you should notify of a winding-up petition being served

Special arrangements apply if the company to which you have served a winding-up petition is:

in voluntary liquidation

in administrative receivership

subject to an administration order or voluntary arrangement

If you discover that any of these arrangements are in place, you must send a copy of the petition on the next working day after service to the:

liquidator

administrative receiver

administrator

supervisor

For more information read company liquidation.

Advertising your petition (form 4.06)

Your petition must be advertised in the Belfast Gazette, at least seven working days after it was served and not later than seven working days before the winding-up hearing. The Gazette is monitored by banks and other financial institutions, which are obliged to freeze the accounts of companies listed, in case they worsen creditors' positions by disposing of assets before the hearing.

Find out how to advertise your petition on the Belfast Gazette.

Certificate of compliance (form 4.07)

At least five working days before the hearing, you must file a certificate of compliance with the court . This is a declaration that you have followed all the relevant procedures correctly, and must be accompanied by a copy of the full page of the Belfast Gazette containing the advert for your petition.

List of persons attending hearing

On the day before the winding-up hearing, you will need to send the Court a list of people who intend to appear. You can do this by completing form 4.10 'List of Persons Intending to Appear on the Hearing of the Petition'.

Withdrawing your petition

You can withdraw your petition if the company concerned pays their debt to you, or for another reason. However, once a petition has been issued, the winding-up hearing will still go ahead in the Court.

Contact the Court staff to find out the procedure for withdrawing your petition.
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What happens at a winding-up hearing?

Information on the court procedures at a winding-up hearing.
A winding-up hearing takes place if a Court decides to accept a winding-up petition from a creditor. If the Court finds that the company is unable to pay its debts or meet its liabilities, it can order it to go into compulsory liquidation.

All winding-up hearings take place in the High Court.

Hearings in the High Court

Your hearing will take place on the date marked - or endorsed - on the petition and copies returned to you by the Court.

For more information, see steps to serve a winding-up petition.

Hearings are presided over by the Master. You can appear in person or instruct a solicitor or barrister. Company creditors can be represented by one of their employees, if they choose, but must get the High Court's permission first.

The High Court will usually hear a large number of petitions on the same day as yours, and the time it begins may vary. You can confirm the time your hearing will begin by calling the Northern Ireland Courts and Tribunals Service Enquiry Line on Tel 0300 200 7812, the day before it is due to take place.

On the day, try to arrive at the High Court at least half an hour before the proceedings begin to give yourself time to familiarise yourself with the building's layout. The Court's officials will tell you which room to go to and you should ensure you are there before your slot begins.

During the hearing, the High Court can then:

make a winding-up order if your papers are in order

dismiss the petition, eg if the company has paid its debt to you or you have come to an agreement

adjourn the hearing if you have not been able to complete the documentation according to the Court's procedures or if you are still in negotiations with the company

make an interim order

make any other order it thinks fit

To find out more about the rules for completing your documentation, see completing a winding-up petition.

After considering the evidence, the High Court will decide whether or not to grant the order, and how costs should be awarded. If the order is granted, the registrar will appoint the Official Receiver to supervise the company's liquidation.
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What happens after a winding-up order is made?

What happens to a company after the court makes a winding-up order against it
If the High Court makes an order to wind up a company it means that the company has gone into compulsory liquidation.

The High court will appoint the Official Receiver (OR) to act as liquidator for the company. The OR's duties are to:

forward to the Registrar of Companies a copy of the order

ensure that the winding-up order is advertised in the Belfast Gazette

advertise the order in any other way if they feel it is appropriate to do so

investigate the company's affairs to find out why it failed

The OR will also report to creditors on the company's assets and liabilities and tell them the likelihood of them being repaid any of their money. The OR also has a duty to investigate the causes of the failure of the company and the conduct of the directors. Where there are assets they may call a meeting of creditors, or ask the Department for Economy to appoint an insolvency practitioner (IP) to sell the assets and pay creditors.

Duties of company directors in liquidation proceedings

During a compulsory liquidation proceeding, the company's directors have the following duties:

giving information about the company's affairs to the OR

giving information about the company to any IP

preserving the company's assets and handing them over to the OR or liquidator

The OR will interview the directors face to face. They will ask for information about the company's accounts, cashflow, assets and liabilities, and anything else affecting its ability to trade.

Directors can make a statement of truth about their conduct, which is admissible as evidence. The OR can also take into account statements of truth made by creditors, other company officials or employees, or third parties such as accountants.

The directors have a duty to ensure that the company's assets have not been disposed of. They must also give the OR or liquidator any management accounts, company books and records, insurance policies and bank statements relating to assets held.

For more information, see company liquidation.

Stays, rescissions and appeals

Even after an order has been made, the winding-up procedure can be stayed or rescinded, or the company can appeal against it. Applications for a permanent or temporary stay can be made by the liquidator, the OR or any creditor. If the High Court grants a permanent stay, the directors will usually regain control of the company.

The High Court can also rescind, or cancel, an order at the request of the OR, the liquidator or creditors. A rescission can be granted if it can be shown, for example, that the High Court did not have all the relevant facts when it was considering the order. Applications must be made within seven days of the order, unless the High Court gives permission otherwise.

The High Court's staff will tell you how to apply for a stay or rescission.

Period of liquidation

How long it takes to liquidate a company's assets will depend on its size and the complexity of its assets and liabilities. It can take some time for the liquidator to establish the facts concerning these, and to translate them into funds for release to creditors.

When the liquidation is complete following a final meeting, the liquidator will give notice to the High Court that winding up is complete and will be released from office. Three months from the date of the notice from the liquidator or OR, the company will be dissolved, unless a request for a deferral has been made. The company is then removed from the public Register at Companies House and ceases to exist.
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Support for winding up a company that owes you money

Sources of information on compulsory winding-up proceedings.
There are several organisations that can provide detailed information about winding up a company that owes you money.

The Insolvency Service

The Insolvency Service is a branch within the Department for the Economy (DfE) that is responsible for insolvency issues in Northern Ireland. This includes investigating the financial affairs of individuals who become bankrupt and failed companies in compulsory liquidation to find out how and why they became insolvent.

Where there is evidence of misconduct they may take action which can result in bankrupts receiving extended restrictions and directors being disqualified, both for periods of up to 15 years.

Read DfE's information about the Insolvency Service.

Institute of Directors

The Institute of Directors (IoD) is a membership organisation for business leaders. It has 30,000 members, as well as a large international network.

Read the IoD's factsheet on the duties and responsibilities of directors.

Companies House

Companies House is responsible for:

incorporating and dissolving limited companies

examining and keeping company information delivered under the Companies Act and other legislation

making this information available to the public

Search for company information using Companies House BETA service.
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Advantages and disadvantages of harmonising terms of employment

Change an employee's terms of employment

In this guide:

Checking the existing employment contract before making changes

How to check the details of an existing employment contract.

Before you think about altering any staff contracts, make sure you know exactly what is in the original. Every employee has a contract as soon as they start working for you, even if it has never been written down.

In addition, employees who work for you for a month or more must be given a written statement of main employment particulars within two months of joining. It is not itself a contract, but it can provide evidence of the contract's terms if there is a dispute. Read more on the written statement.

A contract contains both express and implied terms.

Express terms

Express terms are those which are explicitly agreed between employer and employee, either in writing or orally.

They will be made clear in any letter of appointment or written or oral statement made by the employer and accepted by the employee. Express terms may also be written into an individual contract based on other documents such as collective agreements and company handbooks.

Implied terms

Implied terms are not spelled out in a contract in some cases, because they are considered too obvious to mention. For example, if you offer someone a job, it is implied that they will not steal from the company. Another implied term is that the employer will provide a safe working environment.

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Consulting employees about changes to their terms of employment

When and how to consult employees and their representatives.
Some contracts may contain terms that allow employers to make changes in working conditions. These should be reasonable, for example performing additional tasks to reflect seasonal fluctuations in demand. Do not rely on such terms to make more fundamental changes because your employee may then claim the contract has been breached and may make various legal claims against you.

If you impose changes without an agreement, there will be a breach of contract. If the breach is a fundamental one eg a significant change in pay, an employee could resign and regard themselves as having been given no other choice but to do so. If they have more than one year of continuous employment with you, they can claim unfair constructive dismissal in an industrial tribunal. Damages for financial loss, for example, may also be sought in the civil courts if they have under a year of continuous service with you.

If you want to change terms or conditions in a collective agreement with a trade union that you formally recognise, you should always consult with the Trade Union to reach an agreement.

Consultation should be detailed and undertaken with a view to reaching an agreement and you should fully explain the reasons for any changes.

ICE Regulations

The Information and Consultation of Employees (ICE) Regulations give employees in companies with 50 or more employees the right to request to be informed and consulted about significant developments in the workplace. If 10% or more of employees (subject to a minimum of 15 and a maximum of 2,500) make a valid request, businesses are required to negotiate a procedure for informing and consulting with employees.

TICE Regulations

The Transnational Information and Consultation of Employees (TICE) Regulations give employees in multinational companies the right to be represented on a European Works Council (EWC).

EWCs are designed to allow employees in different European Economic Area (EEA) states to be informed and consulted on transnational issues affecting the company. If your business has 1,000 or more employees and at least 150 employees in each of two or more EEA states, you may be subject to the legislation on transnational information and consultation.

Following the UK's withdrawal from the EU, the government has amended the TICE Regulations so that:

No new requests to set up an EWC or Information and Consultation procedure can be made by people employed in the UK.

Provisions relevant to the ongoing operation of existing EWCs will remain in force.

Requests for information or to establish EWCs or Information and Consultation procedures made but not completed before the UK's withdrawal from the EU will be allowed to complete.

See how to inform and consult your employees.

Consultation can take place on a one-to-one basis or in the form of group briefings. Whichever method you choose, you should provide an opportunity for employees to ask questions. Be prepared to answer these questions and ensure employees have the relevant information they need to prepare for the meeting. Always consider an individual's particular circumstances.
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Failure to agree to employment contract changes

What to do if you can't agree changes to employment contracts with employees.

Sometimes, despite negotiation, you may not be able to reach an agreement with an employee over changes to a contract.

But if you impose changes without agreement, there will be a breach of contract.

As noted in the previous page, if the breach of contract is a fundamental one - for instance if it involves a significant change in pay or working hours - an employee could resign and regard themselves as having been given no other choice than to do so ('constructively dismissed'). If they have one year or more of continuous employment with you, they will be able to claim unfair constructive dismissal in an industrial tribunal.

If the breach of contract has caused them a measurable financial loss, employees can also sue for damages, either in industrial tribunals or in the ordinary courts.

Claims and awards

Industrial tribunal claims must normally be made within three months of the employment ending but civil court claims may be made up to six years from the breach of contract.

Awards for damages in industrial tribunals are limited to £25,000 but there is no limit in the ordinary courts.

If employees are unable to seek damages because they have not suffered financial loss, the court may require the employer to abide by the original contract.

Contracts

You can consider terminating the original contract (dismissing the employee), provided you give the required notice. You should provide the minimum statutory notice period, or the notice specified in the employment contract, whichever is longer. See how to issue the correct periods of notice.

You can offer a new, revised contract to the dismissed employee. If the employee believes the dismissal was unfair, and they have one year or more of continuous employment with you, they may complain to an industrial tribunal. It would be up to the tribunal to decide whether the dismissal was fair or unfair.

The offer of a new contract could reduce the amount of a tribunal award because the employee's financial loss has been lessened by accepting the revised terms or because potentially - by rejecting the offer - they have not complied with their duty to lessen the loss. However, it would be sensible to consider seeking legal advice before any potential contract change.

You may have to follow collective redundancy consultation procedures, even when no reduction of the workforce is planned if you intend to impose new terms and conditions on 20 or more employees by terminating their existing contracts. Read more on the redundancy consultation process.

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Checklist: changing an employee's terms of employment

Find out the key steps to take and pitfalls to avoid when making changes to employment contracts.
You may want to change an employee's contract of employment for a number of reasons. Often the nature of your business has changed, perhaps through expansion, a change in economic circumstances, or a reorganisation.

Things to consider when making changes to an employment contract

Make sure you:

Familiarise yourself thoroughly with the details of any existing contracts before considering what alterations you want to make.

Consult your staff about any changes you wish to introduce and include their trade union or other elected representatives. Simply imposing changes could mean a claim by employees for damages in a civil court, industrial tribunal, or a constructive dismissal claim before an industrial tribunal.

Discuss any changes with your staff in a thorough and detailed way, fully explaining the reasons for any planned alteration and taking into consideration the impact of the proposed changes in individual circumstances. Agreed changes should be confirmed in writing to the employee within one month.

Try, if an agreement cannot be reached with an employee on changes, to negotiate a new contract.

Document as much in writing as possible.

Do not assume an employee's acceptance of changes imposed without agreement. An employee may accept the breach of contract, treat the breach as a termination of the contract, and bring a claim for constructive dismissal or continue working under protest making it clear that the change is being treated as a breach of contract. An employee may complain to an industrial tribunal within three months of the change being imposed. The employee would have to resign and not wait too long before doing so, otherwise, it could be taken as an affirmation of the breach.

Breach of contract cases can only be taken to the industrial tribunal if the employment has been terminated and the claim arises on termination of employment.

If the employee continues to work under protest, they may have to sue in a civil court unless the breach results in loss which can be pursued through the Employment Rights (Northern Ireland) Order 1996 part 4 Protection of Wages as an unlawful deduction from wages claim. Such claims would be made to the Industrial Tribunal.
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Advantages and disadvantages of harmonising terms of employment

How reducing differences in pay and other terms and conditions of employment can benefit your business.
In order to reduce or eliminate differences between categories of employees, such as manual and non-manual workers, you should consider harmonising terms and conditions of employment across your business.

Harmonisation is more likely to lead to an improvement in terms and conditions rather than reducing them.

This will not only make your pay and benefits seem fairer to your staff but also help to ensure your pay and benefits system is not unlawfully discriminatory.

If you intend to use harmonisation to reduce any benefit or entitlement, it is important that this change is agreed before implementation and that the previous guidance on varying a contract of employment is followed.

What terms and conditions of employment can be harmonised?

There are different terms and conditions of employment where harmonisation can be used to benefit your business, such as:

pensions

overtime

notice periods

hours of work

shift premiums

canteen facilities

sick pay schemes

redundancy terms

layoffs and short-time working

holiday entitlements and holiday pay

payment systems and methods of payment

time-recording procedures, eg clocking on and off

fringe benefits, eg health insurance, and company cars

Advantages of harmonisation

The benefits of harmonisation will vary from business to business but may include:

improved productivity

more efficient administration

improved recruitment and retention of employees

better relationships between different grades of staff

Disadvantages of harmonisation

You may encounter certain problems when introducing harmonisation to your business, such as:

increased wages bill and pension scheme contributions

manager and employee resistance to changes to their status or working conditions, especially if they feel they won't personally benefit

employee management problems if traditional controls are removed, such as clocking on and off

Harmonisation following the transfer of employees into your business

If you buy another business, the rights of any employees who transfer as part of the purchase are protected under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). Employees who transfer to your business do so with their pre-existing terms and conditions intact.

You must not change transferred employees' terms and conditions simply to harmonise them with those of your existing staff.

For more information, see responsibilities to employees if you buy or sell a business.

Introducing harmonisation

For harmonisation to succeed in your business, senior managers must be committed. Involve managers, employees, and - if applicable - workplace representatives both before you finalise any harmonisation programme and during its introduction.

Work out the costs and possible benefits of harmonisation and consider whether any of the costs will be offset by changes in working practices.

You will also need to:

set a realistic timescale for the introduction of harmonisation

carry out any necessary training

monitor and maintain the changes
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Support for winding up a company that owes you money

Wind up a limited company that owes you money

In this guide:

What is compulsory winding up?

The legal process of compulsory winding-up orders against insolvent companies through the courts.
In compulsory winding up, a creditor asks the High Court to wind up the affairs of an insolvent limited company. This legal process ends with the company's removal from the Companies House register - effectively ceasing to exist.

Once the order has been made the High Court appoints the Official Receiver (OR) as liquidator. The Official Receiver works for the Insolvency Service and finds out how and why an individual became bankrupt or a company went into compulsory liquidation.

The OR interviews the directors and informs the creditors of the liquidation. If the OR believes the company has enough assets for something to be paid to its creditors the OR will seek the appointment of an insolvency practitioner as liquidator - either by calling a creditors' meeting for the creditors to vote for the liquidator or by asking the Department for the Economy (DfE) to appoint one. If there are no assets the OR will remain liquidator.

Compulsory winding up involves the following:

all the company's contracts - including employee contracts - are completed, transferred or ended

the company ceases to do business

outstanding legal disputes are settled

all of the company's assets are sold

any money owed to the company is collected

any funds are distributed to creditors

surplus funds - after the repayment of all debts - and share capital can be distributed to shareholders

For more information, see insolvency.

Sources of advice

If you are a creditor, it can be expensive to request a compulsory winding-up order, so you should get specialist legal and financial advice before petitioning the Court. Other sources of advice include:

Citizens Advice Northern Ireland

solicitors

accountants

authorised insolvency practitioners

financial advisers

debt advice centres

You will need to instruct a solicitor to handle the winding-up petition. A winding-up petition is heard in the High Court. The High Court may award costs against you if it considers that you have brought the petition inappropriately - eg the company disputes the debt between you.
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How do I wind up a company?

How to petition the High Court or a county court for a winding-up order against a company.
If you are owed money by a company that cannot or will not pay it back, you can apply to the Court for a winding-up order. As part of your petition, you will need to prove to the Court that the company cannot pay its debts.

It can be proved that a company cannot pay its debts if:

a creditor owed over £750 serves the company with a 'statutory demand' - form 4.01 - which the company does not comply with within three weeks

a creditor obtains judgment against the company and execution is unsatisfied (there are not enough assets or funds to clear the debt)

the company cannot pay its debts when they are due

the company's total debts exceed its total assets

Obtaining a judgment

A creditor obtains judgment against the company, it is lodged for enforcement with the Enforcement of Judgments Office and a certificate of unenforceability is issued under Article 19 of the Judgments Enforcement (Northern Ireland) Order 1981.

You must apply to the court if you want to issue a claim for judgment yourself.

Presenting your winding-up petition to the High Court

Winding-up petitions are presented in the Northern Ireland High Court in Belfast.

To contact the High Court, write to:

Northern Ireland High Court
Royal Courts of Justice
Chichester Street
Belfast

Alternatively, you can contact the Northern Ireland Courts and Tribunals Service Enquiry Line on Tel 0300 200 7812.

Find NI Court Service Court contact details and information.
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Completing a winding-up petition

How to complete a winding-up petition for a compulsory winding-up order against a company.
To apply for a compulsory winding-up order against a company, you must pay a deposit to the Department for the Economy (DfE) and you must complete a winding-up petition form 4.02 along with an affidavit (form 4.03) verifying matters giving rise to the petition.

Download winding-up petition form 4.02 (PDF, 97K).

Download affidavit form 4.03 (PDF, 80K).

Access DfE guidance on how to wind up a company that owes you money.

Companies House

You will need details of the company to complete the petition. You can search for company information using the WebCHeck service at Companies House. See find company information using Companies House services.

You can also get company details by calling the Companies House Contact Centre on Tel 0303 1234 500. You may, however, have to pay for some of the information you require.

Grounds for your winding-up petition

The petition will ask you to give your grounds for applying for a winding-up order, as well as other relevant information:

where you have written a letter to the company to ask for your money, you should say what the debt was owed for, the amount you asked for in the letter and the date of the letter

if you sent an invoice that was not paid, you should say what the debt was for, the amount you requested, and the date of the invoice

if you are giving details of a certificate of unenforceability, you should include the date of the judgment, the High Court information and the case number

if you sent a statutory demand for your money, you should give details of the amount you demanded, the date it was served on the registered office, and proof that at least three weeks have passed since it was served

Your grounds for petitioning should always include a statement that the company has not paid the debt, or an agreed proportion of it. You should also say if the company has been struck off, and give the date.

European Community Regulation on insolvency proceedings

In your winding-up petition, you must say whether or not the European Community (EC) Regulation on insolvency proceedings 2000 applies. There are three types of proceedings: 'main', 'secondary' and 'territorial':

Main proceedings - can be opened only in a European Union member state where the debtor company has its 'centre of main interests'.

Secondary proceedings - can be opened in a member state where the debtor company has an establishment. Secondary proceedings apply only to assets located in that state.

Territorial proceedings - can be opened before main proceedings, but only by creditors of a company's establishment in the same country. These proceedings can also be used where main proceedings cannot be opened because the company has its main interests in a country with laws which disallow it.

Companies House provide information on cross-border insolvency proceedings.

If the company is registered in Northern Ireland and mainly carries out business in Northern Ireland, the EC Regulation will apply and the proceedings will be main proceedings. In other circumstances you should seek more legal advice.
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Steps to serve a winding-up petition

How to present a winding-up petition to the court and how to serve a winding-up petition on the debtor company.
When you have completed your winding-up petition you must present it to the Court. You do this by sending these documents:

the original winding-up petition

three copies of the petition - or four if the company has been dissolved

the original affidavit

receipt of deposit for £1165 paid to the Department for the Economy (DfE)

a Court fee of £186

You will also be responsible for the costs involved in advertising the petition in the Belfast Gazette, using a process server for the service of a statutory demand and the petition and any costs for instructing a solicitor.

Download the DfE guidance on how to wind up a company that owes you money (PDF, 44KB).

If the Court is satisfied with your petition and the other documents, it will seal the petition and all copies, and send copies back to you. These will be marked or endorsed with the date and time they were filed, as well as the date and venue of the Court hearing.

Serving the petition on the debtor company

After the High Court has returned the sealed copies of the petition containing the date and time it was filed and the date and venue of the hearing, you must serve it on the company that owes you money. The petition must be served at the company's registered address - as shown on the public Register held by Companies House - either by you or by a process server company.

To find out more about process servers, see statutory demands.

You can serve a petition at the debtor company's registered office by handing it to:

someone who acknowledges themselves as a director, officer or employee of the company

a person authorised to accept service on the company's behalf

a person who - in the server's opinion - is a director, officer or other employee of the company

If you or your agent cannot find a suitable person at the registered offices, the petition can be served by:

placing it in a letter box

placing it on a table, desk, chair, the floor or a radiator

placing it on a receptionist's desk

After serving the petition

Immediately after service of the petition, the petitioner must file an affidavit at Court, verifying the service of the petition (Form 4.04/4.05).

The certificate of service must be sufficient to identify the petition served and must specify:

the name and registered number of the company

the address of the registered office of the company

the name of the petitioner

the Court in which the petition was filed and the Court reference number

the date of the petition

whether the copy served was a sealed copy

the date on which service was effected

the manner in which service was effected

If you cannot serve the petition by any of the methods listed above, you will need to apply to the High Court for permission to use another route, eg posting it to a director's last-known address. If you do this, you must attach a sealed copy of the order for substituted service to the certificate of service.

Where the company has been dissolved, you must serve the extra copy of the petition to the Crown Solicitor for Northern Ireland. This will enable you to apply for it to be restored to the Register.
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After serving a winding-up petition

What to do after you have served a winding-up petition on a debtor company
After you have served a winding-up petition on a company that owes you money, you must complete forms to:

provide the High Court with evidence that the petition has been served

notify specified parties

advertise the petition in the Belfast Gazette

certify compliance with the winding-up petition procedures

Providing evidence of service (form 4.04/4.05)

Immediately after service of the petition, the petitioner must file an affidavit at the High Court, verifying the service of the petition (Form 4.04/4.05). For details of what this must show see steps to serve a winding-up petition.

Other people you should notify of a winding-up petition being served

Special arrangements apply if the company to which you have served a winding-up petition is:

in voluntary liquidation

in administrative receivership

subject to an administration order or voluntary arrangement

If you discover that any of these arrangements are in place, you must send a copy of the petition on the next working day after service to the:

liquidator

administrative receiver

administrator

supervisor

For more information read company liquidation.

Advertising your petition (form 4.06)

Your petition must be advertised in the Belfast Gazette, at least seven working days after it was served and not later than seven working days before the winding-up hearing. The Gazette is monitored by banks and other financial institutions, which are obliged to freeze the accounts of companies listed, in case they worsen creditors' positions by disposing of assets before the hearing.

Find out how to advertise your petition on the Belfast Gazette.

Certificate of compliance (form 4.07)

At least five working days before the hearing, you must file a certificate of compliance with the court . This is a declaration that you have followed all the relevant procedures correctly, and must be accompanied by a copy of the full page of the Belfast Gazette containing the advert for your petition.

List of persons attending hearing

On the day before the winding-up hearing, you will need to send the Court a list of people who intend to appear. You can do this by completing form 4.10 'List of Persons Intending to Appear on the Hearing of the Petition'.

Withdrawing your petition

You can withdraw your petition if the company concerned pays their debt to you, or for another reason. However, once a petition has been issued, the winding-up hearing will still go ahead in the Court.

Contact the Court staff to find out the procedure for withdrawing your petition.
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What happens at a winding-up hearing?

Information on the court procedures at a winding-up hearing.
A winding-up hearing takes place if a Court decides to accept a winding-up petition from a creditor. If the Court finds that the company is unable to pay its debts or meet its liabilities, it can order it to go into compulsory liquidation.

All winding-up hearings take place in the High Court.

Hearings in the High Court

Your hearing will take place on the date marked - or endorsed - on the petition and copies returned to you by the Court.

For more information, see steps to serve a winding-up petition.

Hearings are presided over by the Master. You can appear in person or instruct a solicitor or barrister. Company creditors can be represented by one of their employees, if they choose, but must get the High Court's permission first.

The High Court will usually hear a large number of petitions on the same day as yours, and the time it begins may vary. You can confirm the time your hearing will begin by calling the Northern Ireland Courts and Tribunals Service Enquiry Line on Tel 0300 200 7812, the day before it is due to take place.

On the day, try to arrive at the High Court at least half an hour before the proceedings begin to give yourself time to familiarise yourself with the building's layout. The Court's officials will tell you which room to go to and you should ensure you are there before your slot begins.

During the hearing, the High Court can then:

make a winding-up order if your papers are in order

dismiss the petition, eg if the company has paid its debt to you or you have come to an agreement

adjourn the hearing if you have not been able to complete the documentation according to the Court's procedures or if you are still in negotiations with the company

make an interim order

make any other order it thinks fit

To find out more about the rules for completing your documentation, see completing a winding-up petition.

After considering the evidence, the High Court will decide whether or not to grant the order, and how costs should be awarded. If the order is granted, the registrar will appoint the Official Receiver to supervise the company's liquidation.
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What happens after a winding-up order is made?

What happens to a company after the court makes a winding-up order against it
If the High Court makes an order to wind up a company it means that the company has gone into compulsory liquidation.

The High court will appoint the Official Receiver (OR) to act as liquidator for the company. The OR's duties are to:

forward to the Registrar of Companies a copy of the order

ensure that the winding-up order is advertised in the Belfast Gazette

advertise the order in any other way if they feel it is appropriate to do so

investigate the company's affairs to find out why it failed

The OR will also report to creditors on the company's assets and liabilities and tell them the likelihood of them being repaid any of their money. The OR also has a duty to investigate the causes of the failure of the company and the conduct of the directors. Where there are assets they may call a meeting of creditors, or ask the Department for Economy to appoint an insolvency practitioner (IP) to sell the assets and pay creditors.

Duties of company directors in liquidation proceedings

During a compulsory liquidation proceeding, the company's directors have the following duties:

giving information about the company's affairs to the OR

giving information about the company to any IP

preserving the company's assets and handing them over to the OR or liquidator

The OR will interview the directors face to face. They will ask for information about the company's accounts, cashflow, assets and liabilities, and anything else affecting its ability to trade.

Directors can make a statement of truth about their conduct, which is admissible as evidence. The OR can also take into account statements of truth made by creditors, other company officials or employees, or third parties such as accountants.

The directors have a duty to ensure that the company's assets have not been disposed of. They must also give the OR or liquidator any management accounts, company books and records, insurance policies and bank statements relating to assets held.

For more information, see company liquidation.

Stays, rescissions and appeals

Even after an order has been made, the winding-up procedure can be stayed or rescinded, or the company can appeal against it. Applications for a permanent or temporary stay can be made by the liquidator, the OR or any creditor. If the High Court grants a permanent stay, the directors will usually regain control of the company.

The High Court can also rescind, or cancel, an order at the request of the OR, the liquidator or creditors. A rescission can be granted if it can be shown, for example, that the High Court did not have all the relevant facts when it was considering the order. Applications must be made within seven days of the order, unless the High Court gives permission otherwise.

The High Court's staff will tell you how to apply for a stay or rescission.

Period of liquidation

How long it takes to liquidate a company's assets will depend on its size and the complexity of its assets and liabilities. It can take some time for the liquidator to establish the facts concerning these, and to translate them into funds for release to creditors.

When the liquidation is complete following a final meeting, the liquidator will give notice to the High Court that winding up is complete and will be released from office. Three months from the date of the notice from the liquidator or OR, the company will be dissolved, unless a request for a deferral has been made. The company is then removed from the public Register at Companies House and ceases to exist.
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Support for winding up a company that owes you money

Sources of information on compulsory winding-up proceedings.
There are several organisations that can provide detailed information about winding up a company that owes you money.

The Insolvency Service

The Insolvency Service is a branch within the Department for the Economy (DfE) that is responsible for insolvency issues in Northern Ireland. This includes investigating the financial affairs of individuals who become bankrupt and failed companies in compulsory liquidation to find out how and why they became insolvent.

Where there is evidence of misconduct they may take action which can result in bankrupts receiving extended restrictions and directors being disqualified, both for periods of up to 15 years.

Read DfE's information about the Insolvency Service.

Institute of Directors

The Institute of Directors (IoD) is a membership organisation for business leaders. It has 30,000 members, as well as a large international network.

Read the IoD's factsheet on the duties and responsibilities of directors.

Companies House

Companies House is responsible for:

incorporating and dissolving limited companies

examining and keeping company information delivered under the Companies Act and other legislation

making this information available to the public

Search for company information using Companies House BETA service.
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Completing a winding-up petition

Wind up a limited company that owes you money

In this guide:

What is compulsory winding up?

The legal process of compulsory winding-up orders against insolvent companies through the courts.
In compulsory winding up, a creditor asks the High Court to wind up the affairs of an insolvent limited company. This legal process ends with the company's removal from the Companies House register - effectively ceasing to exist.

Once the order has been made the High Court appoints the Official Receiver (OR) as liquidator. The Official Receiver works for the Insolvency Service and finds out how and why an individual became bankrupt or a company went into compulsory liquidation.

The OR interviews the directors and informs the creditors of the liquidation. If the OR believes the company has enough assets for something to be paid to its creditors the OR will seek the appointment of an insolvency practitioner as liquidator - either by calling a creditors' meeting for the creditors to vote for the liquidator or by asking the Department for the Economy (DfE) to appoint one. If there are no assets the OR will remain liquidator.

Compulsory winding up involves the following:

all the company's contracts - including employee contracts - are completed, transferred or ended

the company ceases to do business

outstanding legal disputes are settled

all of the company's assets are sold

any money owed to the company is collected

any funds are distributed to creditors

surplus funds - after the repayment of all debts - and share capital can be distributed to shareholders

For more information, see insolvency.

Sources of advice

If you are a creditor, it can be expensive to request a compulsory winding-up order, so you should get specialist legal and financial advice before petitioning the Court. Other sources of advice include:

Citizens Advice Northern Ireland

solicitors

accountants

authorised insolvency practitioners

financial advisers

debt advice centres

You will need to instruct a solicitor to handle the winding-up petition. A winding-up petition is heard in the High Court. The High Court may award costs against you if it considers that you have brought the petition inappropriately - eg the company disputes the debt between you.
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How do I wind up a company?

How to petition the High Court or a county court for a winding-up order against a company.
If you are owed money by a company that cannot or will not pay it back, you can apply to the Court for a winding-up order. As part of your petition, you will need to prove to the Court that the company cannot pay its debts.

It can be proved that a company cannot pay its debts if:

a creditor owed over £750 serves the company with a 'statutory demand' - form 4.01 - which the company does not comply with within three weeks

a creditor obtains judgment against the company and execution is unsatisfied (there are not enough assets or funds to clear the debt)

the company cannot pay its debts when they are due

the company's total debts exceed its total assets

Obtaining a judgment

A creditor obtains judgment against the company, it is lodged for enforcement with the Enforcement of Judgments Office and a certificate of unenforceability is issued under Article 19 of the Judgments Enforcement (Northern Ireland) Order 1981.

You must apply to the court if you want to issue a claim for judgment yourself.

Presenting your winding-up petition to the High Court

Winding-up petitions are presented in the Northern Ireland High Court in Belfast.

To contact the High Court, write to:

Northern Ireland High Court
Royal Courts of Justice
Chichester Street
Belfast

Alternatively, you can contact the Northern Ireland Courts and Tribunals Service Enquiry Line on Tel 0300 200 7812.

Find NI Court Service Court contact details and information.
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Completing a winding-up petition

How to complete a winding-up petition for a compulsory winding-up order against a company.
To apply for a compulsory winding-up order against a company, you must pay a deposit to the Department for the Economy (DfE) and you must complete a winding-up petition form 4.02 along with an affidavit (form 4.03) verifying matters giving rise to the petition.

Download winding-up petition form 4.02 (PDF, 97K).

Download affidavit form 4.03 (PDF, 80K).

Access DfE guidance on how to wind up a company that owes you money.

Companies House

You will need details of the company to complete the petition. You can search for company information using the WebCHeck service at Companies House. See find company information using Companies House services.

You can also get company details by calling the Companies House Contact Centre on Tel 0303 1234 500. You may, however, have to pay for some of the information you require.

Grounds for your winding-up petition

The petition will ask you to give your grounds for applying for a winding-up order, as well as other relevant information:

where you have written a letter to the company to ask for your money, you should say what the debt was owed for, the amount you asked for in the letter and the date of the letter

if you sent an invoice that was not paid, you should say what the debt was for, the amount you requested, and the date of the invoice

if you are giving details of a certificate of unenforceability, you should include the date of the judgment, the High Court information and the case number

if you sent a statutory demand for your money, you should give details of the amount you demanded, the date it was served on the registered office, and proof that at least three weeks have passed since it was served

Your grounds for petitioning should always include a statement that the company has not paid the debt, or an agreed proportion of it. You should also say if the company has been struck off, and give the date.

European Community Regulation on insolvency proceedings

In your winding-up petition, you must say whether or not the European Community (EC) Regulation on insolvency proceedings 2000 applies. There are three types of proceedings: 'main', 'secondary' and 'territorial':

Main proceedings - can be opened only in a European Union member state where the debtor company has its 'centre of main interests'.

Secondary proceedings - can be opened in a member state where the debtor company has an establishment. Secondary proceedings apply only to assets located in that state.

Territorial proceedings - can be opened before main proceedings, but only by creditors of a company's establishment in the same country. These proceedings can also be used where main proceedings cannot be opened because the company has its main interests in a country with laws which disallow it.

Companies House provide information on cross-border insolvency proceedings.

If the company is registered in Northern Ireland and mainly carries out business in Northern Ireland, the EC Regulation will apply and the proceedings will be main proceedings. In other circumstances you should seek more legal advice.
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Steps to serve a winding-up petition

How to present a winding-up petition to the court and how to serve a winding-up petition on the debtor company.
When you have completed your winding-up petition you must present it to the Court. You do this by sending these documents:

the original winding-up petition

three copies of the petition - or four if the company has been dissolved

the original affidavit

receipt of deposit for £1165 paid to the Department for the Economy (DfE)

a Court fee of £186

You will also be responsible for the costs involved in advertising the petition in the Belfast Gazette, using a process server for the service of a statutory demand and the petition and any costs for instructing a solicitor.

Download the DfE guidance on how to wind up a company that owes you money (PDF, 44KB).

If the Court is satisfied with your petition and the other documents, it will seal the petition and all copies, and send copies back to you. These will be marked or endorsed with the date and time they were filed, as well as the date and venue of the Court hearing.

Serving the petition on the debtor company

After the High Court has returned the sealed copies of the petition containing the date and time it was filed and the date and venue of the hearing, you must serve it on the company that owes you money. The petition must be served at the company's registered address - as shown on the public Register held by Companies House - either by you or by a process server company.

To find out more about process servers, see statutory demands.

You can serve a petition at the debtor company's registered office by handing it to:

someone who acknowledges themselves as a director, officer or employee of the company

a person authorised to accept service on the company's behalf

a person who - in the server's opinion - is a director, officer or other employee of the company

If you or your agent cannot find a suitable person at the registered offices, the petition can be served by:

placing it in a letter box

placing it on a table, desk, chair, the floor or a radiator

placing it on a receptionist's desk

After serving the petition

Immediately after service of the petition, the petitioner must file an affidavit at Court, verifying the service of the petition (Form 4.04/4.05).

The certificate of service must be sufficient to identify the petition served and must specify:

the name and registered number of the company

the address of the registered office of the company

the name of the petitioner

the Court in which the petition was filed and the Court reference number

the date of the petition

whether the copy served was a sealed copy

the date on which service was effected

the manner in which service was effected

If you cannot serve the petition by any of the methods listed above, you will need to apply to the High Court for permission to use another route, eg posting it to a director's last-known address. If you do this, you must attach a sealed copy of the order for substituted service to the certificate of service.

Where the company has been dissolved, you must serve the extra copy of the petition to the Crown Solicitor for Northern Ireland. This will enable you to apply for it to be restored to the Register.
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After serving a winding-up petition

What to do after you have served a winding-up petition on a debtor company
After you have served a winding-up petition on a company that owes you money, you must complete forms to:

provide the High Court with evidence that the petition has been served

notify specified parties

advertise the petition in the Belfast Gazette

certify compliance with the winding-up petition procedures

Providing evidence of service (form 4.04/4.05)

Immediately after service of the petition, the petitioner must file an affidavit at the High Court, verifying the service of the petition (Form 4.04/4.05). For details of what this must show see steps to serve a winding-up petition.

Other people you should notify of a winding-up petition being served

Special arrangements apply if the company to which you have served a winding-up petition is:

in voluntary liquidation

in administrative receivership

subject to an administration order or voluntary arrangement

If you discover that any of these arrangements are in place, you must send a copy of the petition on the next working day after service to the:

liquidator

administrative receiver

administrator

supervisor

For more information read company liquidation.

Advertising your petition (form 4.06)

Your petition must be advertised in the Belfast Gazette, at least seven working days after it was served and not later than seven working days before the winding-up hearing. The Gazette is monitored by banks and other financial institutions, which are obliged to freeze the accounts of companies listed, in case they worsen creditors' positions by disposing of assets before the hearing.

Find out how to advertise your petition on the Belfast Gazette.

Certificate of compliance (form 4.07)

At least five working days before the hearing, you must file a certificate of compliance with the court . This is a declaration that you have followed all the relevant procedures correctly, and must be accompanied by a copy of the full page of the Belfast Gazette containing the advert for your petition.

List of persons attending hearing

On the day before the winding-up hearing, you will need to send the Court a list of people who intend to appear. You can do this by completing form 4.10 'List of Persons Intending to Appear on the Hearing of the Petition'.

Withdrawing your petition

You can withdraw your petition if the company concerned pays their debt to you, or for another reason. However, once a petition has been issued, the winding-up hearing will still go ahead in the Court.

Contact the Court staff to find out the procedure for withdrawing your petition.
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What happens at a winding-up hearing?

Information on the court procedures at a winding-up hearing.
A winding-up hearing takes place if a Court decides to accept a winding-up petition from a creditor. If the Court finds that the company is unable to pay its debts or meet its liabilities, it can order it to go into compulsory liquidation.

All winding-up hearings take place in the High Court.

Hearings in the High Court

Your hearing will take place on the date marked - or endorsed - on the petition and copies returned to you by the Court.

For more information, see steps to serve a winding-up petition.

Hearings are presided over by the Master. You can appear in person or instruct a solicitor or barrister. Company creditors can be represented by one of their employees, if they choose, but must get the High Court's permission first.

The High Court will usually hear a large number of petitions on the same day as yours, and the time it begins may vary. You can confirm the time your hearing will begin by calling the Northern Ireland Courts and Tribunals Service Enquiry Line on Tel 0300 200 7812, the day before it is due to take place.

On the day, try to arrive at the High Court at least half an hour before the proceedings begin to give yourself time to familiarise yourself with the building's layout. The Court's officials will tell you which room to go to and you should ensure you are there before your slot begins.

During the hearing, the High Court can then:

make a winding-up order if your papers are in order

dismiss the petition, eg if the company has paid its debt to you or you have come to an agreement

adjourn the hearing if you have not been able to complete the documentation according to the Court's procedures or if you are still in negotiations with the company

make an interim order

make any other order it thinks fit

To find out more about the rules for completing your documentation, see completing a winding-up petition.

After considering the evidence, the High Court will decide whether or not to grant the order, and how costs should be awarded. If the order is granted, the registrar will appoint the Official Receiver to supervise the company's liquidation.
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What happens after a winding-up order is made?

What happens to a company after the court makes a winding-up order against it
If the High Court makes an order to wind up a company it means that the company has gone into compulsory liquidation.

The High court will appoint the Official Receiver (OR) to act as liquidator for the company. The OR's duties are to:

forward to the Registrar of Companies a copy of the order

ensure that the winding-up order is advertised in the Belfast Gazette

advertise the order in any other way if they feel it is appropriate to do so

investigate the company's affairs to find out why it failed

The OR will also report to creditors on the company's assets and liabilities and tell them the likelihood of them being repaid any of their money. The OR also has a duty to investigate the causes of the failure of the company and the conduct of the directors. Where there are assets they may call a meeting of creditors, or ask the Department for Economy to appoint an insolvency practitioner (IP) to sell the assets and pay creditors.

Duties of company directors in liquidation proceedings

During a compulsory liquidation proceeding, the company's directors have the following duties:

giving information about the company's affairs to the OR

giving information about the company to any IP

preserving the company's assets and handing them over to the OR or liquidator

The OR will interview the directors face to face. They will ask for information about the company's accounts, cashflow, assets and liabilities, and anything else affecting its ability to trade.

Directors can make a statement of truth about their conduct, which is admissible as evidence. The OR can also take into account statements of truth made by creditors, other company officials or employees, or third parties such as accountants.

The directors have a duty to ensure that the company's assets have not been disposed of. They must also give the OR or liquidator any management accounts, company books and records, insurance policies and bank statements relating to assets held.

For more information, see company liquidation.

Stays, rescissions and appeals

Even after an order has been made, the winding-up procedure can be stayed or rescinded, or the company can appeal against it. Applications for a permanent or temporary stay can be made by the liquidator, the OR or any creditor. If the High Court grants a permanent stay, the directors will usually regain control of the company.

The High Court can also rescind, or cancel, an order at the request of the OR, the liquidator or creditors. A rescission can be granted if it can be shown, for example, that the High Court did not have all the relevant facts when it was considering the order. Applications must be made within seven days of the order, unless the High Court gives permission otherwise.

The High Court's staff will tell you how to apply for a stay or rescission.

Period of liquidation

How long it takes to liquidate a company's assets will depend on its size and the complexity of its assets and liabilities. It can take some time for the liquidator to establish the facts concerning these, and to translate them into funds for release to creditors.

When the liquidation is complete following a final meeting, the liquidator will give notice to the High Court that winding up is complete and will be released from office. Three months from the date of the notice from the liquidator or OR, the company will be dissolved, unless a request for a deferral has been made. The company is then removed from the public Register at Companies House and ceases to exist.
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Support for winding up a company that owes you money

Sources of information on compulsory winding-up proceedings.
There are several organisations that can provide detailed information about winding up a company that owes you money.

The Insolvency Service

The Insolvency Service is a branch within the Department for the Economy (DfE) that is responsible for insolvency issues in Northern Ireland. This includes investigating the financial affairs of individuals who become bankrupt and failed companies in compulsory liquidation to find out how and why they became insolvent.

Where there is evidence of misconduct they may take action which can result in bankrupts receiving extended restrictions and directors being disqualified, both for periods of up to 15 years.

Read DfE's information about the Insolvency Service.

Institute of Directors

The Institute of Directors (IoD) is a membership organisation for business leaders. It has 30,000 members, as well as a large international network.

Read the IoD's factsheet on the duties and responsibilities of directors.

Companies House

Companies House is responsible for:

incorporating and dissolving limited companies

examining and keeping company information delivered under the Companies Act and other legislation

making this information available to the public

Search for company information using Companies House BETA service.
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Read more about Completing a winding-up petition

Ensuring you are registered as a creditor

Owed money from a bankrupt or a company in liquidation

In this guide:

Who deals with bankruptcy and company liquidation claims?

The role of the official receiver, insolvency practitioner, trustee and liquidator, and relevant costs and fees

The early stages of a bankruptcy or compulsory liquidation are usually handled by the official receiver (OR). If there are significant assets, an insolvency practitioner (IP) may be appointed as trustee/liquidator in place of the OR.

The OR is a civil servant at the Insolvency Service and an officer of the High Court. The Insolvency Service is responsible for dealing with financial failure and misconduct through the OR. As well as administering cases, the OR has a duty to investigate the affairs of individuals in bankruptcy and companies in compulsory liquidation.

IPs are licensed insolvency specialists who work in the private sector - usually as accountants or solicitors. By law, they must be authorised to act as IPs. They handle all other insolvency procedures except fast-track voluntary arrangements and debt relief orders. To find out more see individual voluntary arrangements, administration orders and debt relief orders.

Both the OR and IPs are legally required to report unfit conduct to the Directors Disqualification Unit of The Insolvency Service. They will then decide whether or not to begin court proceedings to disqualify the director or extend the restrictions on a bankrupt.

The trustee in bankruptcy is the OR/IP who takes control of the assets. The trustee's main duties are to sell these assets and share out the money among the creditors.

The liquidator is the OR/IP appointed to administer the liquidation of a company or partnership.

Trustee or liquidator payment

Payment - known as remuneration - the OR acting as trustee/liquidator is specified under insolvency law.

If an IP is acting as trustee/liquidator, the remuneration can be fixed as a percentage of the value of the assets realised - sold - and distributed, or on a time basis. If creditors don't agree a remuneration, the IP gets the same amount that would have been paid to the OR - unless the IP applies to court and arranges a higher amount.

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Ensuring you are registered as a creditor

How to find contact details for the official receiver or insolvency practitioner dealing with your debtor's case
If the official receiver (OR) or insolvency practitioner (IP) dealing with the case of someone who owes you money knows that you are a creditor, you should be contacted automatically. All known creditors are notified of the initial bankruptcy or winding-up order.

If you believe a company or individual that owes you money may be subject to insolvency proceedings, and you haven't been notified, you should write to the OR/IP dealing with it. You should give the full name of the company or individual, as well as your own details.

Any information you can provide about the assets of the company or individual - or about the conduct of the director(s) or individual - would also be useful.

There are various ways of finding out who is dealing with the case:

For a company insolvency, search for details using the Companies House BETA service.

Contact the Insolvency Service NI Enquiry Line on Tel 028 9054 8531 or by email at insolvency@economy-ni.gov.uk.

Insolvency notices and details about administrators/liquidators/trustees are published in The Belfast Gazette.

If a partnership is involved, bankruptcy orders may have been made against individual partners - details of which would be on the register maintained by the High Court.

Don't expect frequent updates from the OR/IP. After your claim is filed, you will be sent a report to creditors - which will give you information about the assets and liabilities of the company or individual, and the circumstances of the insolvency.

It can take weeks, months or even years to realise - sell - assets. If you are concerned, contact the OR/IP handling the case. Remember to notify the OR/IP if you change your address.
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Order of priority for repayment of creditors

The strict order of priority in which creditors are repaid
Secured creditors are the first to get paid when a debtor's assets are realised - sold or disposed of to raise money. For example, a creditor who holds a fixed charge - a security interest taken to protect against non-payment of debt - or security on an asset such as a mortgage has the right to sell the asset to recover their debt. Any surplus money is then handed over to the trustee/liquidator.

After the secured debts have been repaid, the trustee/liquidator distributes the remaining proceeds to pay the following - in strict order of priority:

Liquidation/bankruptcy fees and charges - this does not include court fees.

Debts due to preferential creditors - those entitled to certain payments in priority over other unsecured creditors - including wages owed in the four months before the date of the insolvency order, as well as all holiday pay and contributions to occupational pension schemes.

In company cases, any creditor holding a floating charge over an asset, such as a debenture. This is where a class of goods or assets - eg the debtor's stock - are named as security for a debt.

All unsecured creditors.

Any interest payable on debts.

The shareholders in company cases.

If full repayment of unsecured claims isn't possible, the money available is divided between creditors in proportion to the value of each claim.

How much you are paid will depend on the amount of money that can be realised and the number of claims. If there are few assets, you may not get anything.

If you wish to see a full list of creditors showing how much each is owed, you can ask the official receiver (OR)/insolvency practitioner (IP) for this. The OR/IP is allowed to charge a fee for this service. Alternatively, you have a right to view the court file - unless the court directs otherwise.

If a statement of affairs has been submitted, the OR/IP will direct you to the court file. A statement of affairs is a document completed by a bankrupt, company officer, or director(s) stating the assets and giving details of all debts and creditors.

When paying a dividend, the OR/IP can reject the whole or part of a creditor's claim but must give reasons for doing so in writing. If you are dissatisfied with the decision on your claim, you can apply to the court in which the bankruptcy or winding-up order was made for it to be reversed or varied.
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Making a bankruptcy or company liquidation claim

Submitting a proof of debt form for your claim

If you have been contacted by the official receiver (OR) or insolvency practitioner (IP) who is acting as the trustee/liquidator, then they already have a note of your claim. If you contacted the OR/IP, your details will have been added to the list of creditors.

You will be sent a proof of debt form to complete and return if the OR/IP intends to make a payment to creditors or hold a meeting of creditors. The information you provide helps the OR/IP confirm that you are a genuine creditor and the amount you are owed.

Access the Department for the Economy (DfE) insolvency forms.

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Creditors' meetings and creditors'/liquidation committees

Procedures for calling a meeting of creditors and for appointing a creditors' committee or liquidation committee
The official receiver (OR) usually decides to hold a first meeting of creditors if there are significant assets to be realised - ie sold. This is so creditors can vote to appoint an insolvency practitioner (IP) as trustee or liquidator.

If the OR doesn't believe the assets available are enough to attract an IP, the OR will send notice to all creditors that no first meeting is to be held and that they will be the trustee/liquidator.

The OR must hold a first meeting if it's requested, in writing, by enough creditors to account for at least 25 per cent of the value of debt owed. Creditors requesting a meeting have to lodge a deposit to cover any costs of that meeting.

Further meetings of creditors - called general meetings - are sometimes held, if:

requested by enough creditors to account for at least 25 per cent of the value of debt owed

the trustee/liquidator wants to find out the creditors' wishes in any matter relating to the insolvency proceedings

Where an IP is trustee/liquidator, a final meeting of creditors will eventually be called - see completion of bankruptcy and company liquidation cases.

Appointing a creditors'/liquidation committee

Where an IP is appointed, a creditors/liquidation committee can also be appointed to supervise the trustee/liquidator on behalf of the creditors. In liquidations - it's called a liquidation committee, in bankruptcies - it's called a creditors' committee.

The committee consists of between three and five elected creditors. You have a right to nominate yourself or any other creditor to be a committee member, and you can vote for yourself. The elected creditor can act personally, or appoint a representative.

If certain actions are proposed by the trustee/liquidator, they need to be approved by the creditors'/liquidation committee.
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Conduct and voting at creditors' meetings

What happens at a first meeting of creditors, how an insolvency practitioner is appointed and the rules on voting

At a first meeting of creditors, the chair - usually the official receiver (OR) will check that everyone present is allowed to be at the meeting, explain its purpose and give details about the insolvent's assets. The meeting then votes on the appointment of an insolvency practitioner (IP) as trustee or liquidator.

You can normally only vote at a meeting if you returned your proof of debt form to the OR within the time limit specified. For more information on proof of debt forms, see making a claim and the order of repayment.

If you won't be attending the meeting and would like someone to vote on your behalf, you must submit a proxy form. You will find the proxy form supplied with the OR's notice that the creditors' meeting has been called.

Voting at a meeting of creditors is by value. This means certain voters may have more than one or a greater proportion of the vote - dependent on the amount of money they are owed. The chair will calculate this after checking the proofs of debt and proxy forms that have been submitted.

For an IP to be appointed by the meeting of creditors, the vote must be supported by a majority in value - relating to the total debt owed.

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Completion of bankruptcy and company liquidation cases

How the official receiver or insolvency practitioner is released from the case and your right to object

If the official receiver (OR) is dealing with the insolvency case for which you are a creditor, they will inform you when they have completed the insolvency. You will also be sent a summary of the OR's receipts and payments as trustee/liquidator.

As a creditor, you can object to the OR's release. Generally, the OR's release can only be withheld if they have failed to realise - sell - assets that were available to be realised, or have misapplied the proceeds of any assets realised.

If an insolvency practitioner (IP) is dealing with the case, you will be invited to the final meeting of creditors. At this meeting, the IP will report on how they have handled the case and give a summary of the receipts and payments. The creditors may question the liquidator about what is in the report and have the option of either granting or refusing the release of the IP.

What legal action can I take against the bankrupt, company or the trustee/liquidator?

After the date of the court order, unsecured creditors cannot take any action against the bankrupt or company without the court's consent. You must submit your claim to the trustee/liquidator. You can apply to the court if you are dissatisfied with the actions of the OR/IP. Before you apply to the court you may wish to take legal advice.

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Read more about Ensuring you are registered as a creditor

Who deals with bankruptcy and company liquidation claims?

Owed money from a bankrupt or a company in liquidation

In this guide:

Who deals with bankruptcy and company liquidation claims?

The role of the official receiver, insolvency practitioner, trustee and liquidator, and relevant costs and fees

The early stages of a bankruptcy or compulsory liquidation are usually handled by the official receiver (OR). If there are significant assets, an insolvency practitioner (IP) may be appointed as trustee/liquidator in place of the OR.

The OR is a civil servant at the Insolvency Service and an officer of the High Court. The Insolvency Service is responsible for dealing with financial failure and misconduct through the OR. As well as administering cases, the OR has a duty to investigate the affairs of individuals in bankruptcy and companies in compulsory liquidation.

IPs are licensed insolvency specialists who work in the private sector - usually as accountants or solicitors. By law, they must be authorised to act as IPs. They handle all other insolvency procedures except fast-track voluntary arrangements and debt relief orders. To find out more see individual voluntary arrangements, administration orders and debt relief orders.

Both the OR and IPs are legally required to report unfit conduct to the Directors Disqualification Unit of The Insolvency Service. They will then decide whether or not to begin court proceedings to disqualify the director or extend the restrictions on a bankrupt.

The trustee in bankruptcy is the OR/IP who takes control of the assets. The trustee's main duties are to sell these assets and share out the money among the creditors.

The liquidator is the OR/IP appointed to administer the liquidation of a company or partnership.

Trustee or liquidator payment

Payment - known as remuneration - the OR acting as trustee/liquidator is specified under insolvency law.

If an IP is acting as trustee/liquidator, the remuneration can be fixed as a percentage of the value of the assets realised - sold - and distributed, or on a time basis. If creditors don't agree a remuneration, the IP gets the same amount that would have been paid to the OR - unless the IP applies to court and arranges a higher amount.

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Ensuring you are registered as a creditor

How to find contact details for the official receiver or insolvency practitioner dealing with your debtor's case
If the official receiver (OR) or insolvency practitioner (IP) dealing with the case of someone who owes you money knows that you are a creditor, you should be contacted automatically. All known creditors are notified of the initial bankruptcy or winding-up order.

If you believe a company or individual that owes you money may be subject to insolvency proceedings, and you haven't been notified, you should write to the OR/IP dealing with it. You should give the full name of the company or individual, as well as your own details.

Any information you can provide about the assets of the company or individual - or about the conduct of the director(s) or individual - would also be useful.

There are various ways of finding out who is dealing with the case:

For a company insolvency, search for details using the Companies House BETA service.

Contact the Insolvency Service NI Enquiry Line on Tel 028 9054 8531 or by email at insolvency@economy-ni.gov.uk.

Insolvency notices and details about administrators/liquidators/trustees are published in The Belfast Gazette.

If a partnership is involved, bankruptcy orders may have been made against individual partners - details of which would be on the register maintained by the High Court.

Don't expect frequent updates from the OR/IP. After your claim is filed, you will be sent a report to creditors - which will give you information about the assets and liabilities of the company or individual, and the circumstances of the insolvency.

It can take weeks, months or even years to realise - sell - assets. If you are concerned, contact the OR/IP handling the case. Remember to notify the OR/IP if you change your address.
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Order of priority for repayment of creditors

The strict order of priority in which creditors are repaid
Secured creditors are the first to get paid when a debtor's assets are realised - sold or disposed of to raise money. For example, a creditor who holds a fixed charge - a security interest taken to protect against non-payment of debt - or security on an asset such as a mortgage has the right to sell the asset to recover their debt. Any surplus money is then handed over to the trustee/liquidator.

After the secured debts have been repaid, the trustee/liquidator distributes the remaining proceeds to pay the following - in strict order of priority:

Liquidation/bankruptcy fees and charges - this does not include court fees.

Debts due to preferential creditors - those entitled to certain payments in priority over other unsecured creditors - including wages owed in the four months before the date of the insolvency order, as well as all holiday pay and contributions to occupational pension schemes.

In company cases, any creditor holding a floating charge over an asset, such as a debenture. This is where a class of goods or assets - eg the debtor's stock - are named as security for a debt.

All unsecured creditors.

Any interest payable on debts.

The shareholders in company cases.

If full repayment of unsecured claims isn't possible, the money available is divided between creditors in proportion to the value of each claim.

How much you are paid will depend on the amount of money that can be realised and the number of claims. If there are few assets, you may not get anything.

If you wish to see a full list of creditors showing how much each is owed, you can ask the official receiver (OR)/insolvency practitioner (IP) for this. The OR/IP is allowed to charge a fee for this service. Alternatively, you have a right to view the court file - unless the court directs otherwise.

If a statement of affairs has been submitted, the OR/IP will direct you to the court file. A statement of affairs is a document completed by a bankrupt, company officer, or director(s) stating the assets and giving details of all debts and creditors.

When paying a dividend, the OR/IP can reject the whole or part of a creditor's claim but must give reasons for doing so in writing. If you are dissatisfied with the decision on your claim, you can apply to the court in which the bankruptcy or winding-up order was made for it to be reversed or varied.
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Making a bankruptcy or company liquidation claim

Submitting a proof of debt form for your claim

If you have been contacted by the official receiver (OR) or insolvency practitioner (IP) who is acting as the trustee/liquidator, then they already have a note of your claim. If you contacted the OR/IP, your details will have been added to the list of creditors.

You will be sent a proof of debt form to complete and return if the OR/IP intends to make a payment to creditors or hold a meeting of creditors. The information you provide helps the OR/IP confirm that you are a genuine creditor and the amount you are owed.

Access the Department for the Economy (DfE) insolvency forms.

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/content/making-bankruptcy-or-company-liquidation-claim

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Creditors' meetings and creditors'/liquidation committees

Procedures for calling a meeting of creditors and for appointing a creditors' committee or liquidation committee
The official receiver (OR) usually decides to hold a first meeting of creditors if there are significant assets to be realised - ie sold. This is so creditors can vote to appoint an insolvency practitioner (IP) as trustee or liquidator.

If the OR doesn't believe the assets available are enough to attract an IP, the OR will send notice to all creditors that no first meeting is to be held and that they will be the trustee/liquidator.

The OR must hold a first meeting if it's requested, in writing, by enough creditors to account for at least 25 per cent of the value of debt owed. Creditors requesting a meeting have to lodge a deposit to cover any costs of that meeting.

Further meetings of creditors - called general meetings - are sometimes held, if:

requested by enough creditors to account for at least 25 per cent of the value of debt owed

the trustee/liquidator wants to find out the creditors' wishes in any matter relating to the insolvency proceedings

Where an IP is trustee/liquidator, a final meeting of creditors will eventually be called - see completion of bankruptcy and company liquidation cases.

Appointing a creditors'/liquidation committee

Where an IP is appointed, a creditors/liquidation committee can also be appointed to supervise the trustee/liquidator on behalf of the creditors. In liquidations - it's called a liquidation committee, in bankruptcies - it's called a creditors' committee.

The committee consists of between three and five elected creditors. You have a right to nominate yourself or any other creditor to be a committee member, and you can vote for yourself. The elected creditor can act personally, or appoint a representative.

If certain actions are proposed by the trustee/liquidator, they need to be approved by the creditors'/liquidation committee.
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Conduct and voting at creditors' meetings

What happens at a first meeting of creditors, how an insolvency practitioner is appointed and the rules on voting

At a first meeting of creditors, the chair - usually the official receiver (OR) will check that everyone present is allowed to be at the meeting, explain its purpose and give details about the insolvent's assets. The meeting then votes on the appointment of an insolvency practitioner (IP) as trustee or liquidator.

You can normally only vote at a meeting if you returned your proof of debt form to the OR within the time limit specified. For more information on proof of debt forms, see making a claim and the order of repayment.

If you won't be attending the meeting and would like someone to vote on your behalf, you must submit a proxy form. You will find the proxy form supplied with the OR's notice that the creditors' meeting has been called.

Voting at a meeting of creditors is by value. This means certain voters may have more than one or a greater proportion of the vote - dependent on the amount of money they are owed. The chair will calculate this after checking the proofs of debt and proxy forms that have been submitted.

For an IP to be appointed by the meeting of creditors, the vote must be supported by a majority in value - relating to the total debt owed.

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Completion of bankruptcy and company liquidation cases

How the official receiver or insolvency practitioner is released from the case and your right to object

If the official receiver (OR) is dealing with the insolvency case for which you are a creditor, they will inform you when they have completed the insolvency. You will also be sent a summary of the OR's receipts and payments as trustee/liquidator.

As a creditor, you can object to the OR's release. Generally, the OR's release can only be withheld if they have failed to realise - sell - assets that were available to be realised, or have misapplied the proceeds of any assets realised.

If an insolvency practitioner (IP) is dealing with the case, you will be invited to the final meeting of creditors. At this meeting, the IP will report on how they have handled the case and give a summary of the receipts and payments. The creditors may question the liquidator about what is in the report and have the option of either granting or refusing the release of the IP.

What legal action can I take against the bankrupt, company or the trustee/liquidator?

After the date of the court order, unsecured creditors cannot take any action against the bankrupt or company without the court's consent. You must submit your claim to the trustee/liquidator. You can apply to the court if you are dissatisfied with the actions of the OR/IP. Before you apply to the court you may wish to take legal advice.

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Read more about Who deals with bankruptcy and company liquidation claims?

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Conducting industrial action ballots

Industrial disputes

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Statutory conditions for immunity when organising industrial action

1. The need for there to be a trade dispute

2. The need to hold an industrial action ballot

3. The need to provide a notice of official industrial action to the employer

4. The action is not 'secondary action'

5. The action is not to promote closed-shop practices or against non-union firms

6. The action is not in support of an employee dismissed for taking part in unofficial industrial action

7. The action doesn't involve unlawful picketing

Failure to gain statutory immunity

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Lawful industrial action

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1. Picketing

2. Notifying the employer before industrial action resumes

3. Dismissal for taking industrial action

4. Pay during industrial action

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Conducting negotiations to resolve disputes

Who should conduct the negotiations?

Negotiating styles

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Who can be sued as a result of unlawful industrial action?

Trade union liability for inducing breach of contract

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Conducting industrial action ballots

1. Independent scrutiny

2. Sending employers notice of the ballot and a sample voting paper

3. Timing of the ballot and related action

4. Entitlement to vote

5. Voting procedures

6. Majority support

7. Announcing ballot results

8. Consequences of a union's failure to meet balloting requirements

9. Calls for industrial action from individuals unspecified on the voting paper

10. Statutory code of practice on industrial action notices and ballots

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Employment Agency Inspectorate: compliance and enforcement

Employment agencies and employment businesses: record keeping

Employment agencies and employment businesses: keeping work-seekers' records

Records data you must keep

Charging fees and records you must keep

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Employment agencies and businesses: keeping hiring company records

Records you must keep when dealing with companies hiring staff

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Keeping records for multiple employment agencies

Records you must keep: multiple employment agencies

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