Good Jobs Podcast: Theme B with Kevin Gallagher and Patricia Coulter

Part 3 of our "Good Jobs" mini series is here!

In this episode, Kevin Gallagher is joined by Patricia Coulter of the Labour Relations Agency to unpack Theme B of Northern Ireland’s proposed “Good Jobs” Employment Rights Bill which focuses on Pay and Benefits.

They discuss what’s changing (and what’s not) with holiday pay, working time, record-keeping, payslips and tips and Patricia outlines how the LRA supports employers to implement these changes effectively.

Tune in for clear takeaways and what to watch out for next as codes and guidance take shape.

Transcript

Good Jobs Podcast: Theme B with Kevin Gallagher and Patricia Coulter

Kevin Gallagher: Welcome back to our Northern Ireland Good Jobs mini-series. I'm Kevin Gallagher, a legal director in the team at Lewis Silkin. And today we're focusing on theme B of the Good Jobs Employment Rights Consultation Response, which deals with pay and benefits. We're going to have a chat about what the department's proposals in their so-called the Way Forward Response document could mean in practice for employers in Northern Ireland. A quick caveat at the outset.

The measures we'll discuss still require executive agreements, assembly scrutiny, and in several areas supporting codes of practice and guidance. So, if you're listening to this in 2026 and beyond, be aware that aspects may have changed on their way through the legislative process. With that in mind, I'm delighted to be joined by Patricia Coulter from the Labour Relations Agency, who's going to help us explore how employers can prepare. Patricia will also tell us about the role the Labour Relations Agency will play in supporting effective practical adoption of the new measures introduced. p Patricia, you're very welcome.

Patricia Coulter: Thanks very much, Kevin, delighted to be here.

Kevin Gallagher: Well, thank you for joining us. Patricia, to get things started, as our listeners will know, the Department of Economy carried out a consultation exercise last year and then her response document published in April, the minister set out the measures she proposes to take forward. Can you give us some insight into the LRA's role from here in bringing these proposals to life as part of a new piece of employment legislation for Northern Ireland?

Patricia Coulter: Certainly, Kevin. So just to say to you that in terms of the role of the agency, our vision is to be widely recognised as Northern Ireland's leading authority in promoting productive work and relationships for the benefit of individuals and organisations and to support the creation of a thriving and inclusive economy. And just to say to you, we bring that vision to all of the work we do in supporting the rollout of any new legislation. Now, just to be clear, the drafting of the legislation is a responsibility of the department.

Our role is really to help and support individuals and organisations know about the legislation, understand it and assist them in terms of appropriate implementation of it. Now the Way Forward document itself did set out some specific detail in terms of what our actual role was, but I think the most important thing is the Minister did say in the letter that there's this overriding role that we have in terms of providing support to the department in terms of the rollout of all of the content of the Good Jobs Bill.

But if I was just to try and break it down, I suppose a wee bit more for you in terms of operationally what we do. Our work really begins at a very early stage in this process, and we do deliver services through our core operational services. So, at the very beginning, we have our advisory service and this, role of the advisory service is really paramount. That's where we will produce user friendly guidance that could include webinars, podcasts, written guidance in the form of information or templates. We may also be asked to provide code of practice guidance or work with the department in the work that they're doing on producing codes. And also we have a really critical role in terms of raising awareness of the new legislation to help employers and workers alike prepare for the introduction of the new legislation and we'll do this really through speaking at events, through conferences we attend, through our website or any other means we have at our disposal. So that's the advisory services.

We also have our workplace information service and that's like our helpline. We will answer very specific queries that are being raised by employers, by workers in terms of specific issues that they may have challenges with, and we can help in a system through that. And then finally, once the legislation has been implemented and it's being applied in practice, any disputes which may arise might come through our early conciliation service might continue then on through our post-EC conciliation if the claims are subsequently lodged at Tribunal. So, our conciliation service would then kick in. Really just in summary, we're going to be really heavily involved at all stages of the legislation as it's introduced and as it's embedded into the legislation.

Kevin Gallagher: So, the whole life cycle and many different hats to wear as part of that process. And I expect some very busy times ahead for the LRA. I expect after such a long period without a functioning assembly in Northern Ireland, it's good to see the prospect of legislation and development in employment law in this jurisdiction.

Patricia Coulter: Absolutely, Kevin. I think, you know, we've been a long time without any real development in terms of legislation. We are playing a bit of catch up with GB, but I think also importantly, through this Good Jobs Bill, we're looking at things from Northern Ireland perspective and we're trying to bring forward legislation which suits our jurisdiction and suits our needs. So, it's really exciting times for us.

Kevin Gallagher: Well, let's turn and look at some of the proposals under this theme. Starting with what I'm sure everyone will agree is the headline proposal in relation to holiday pay. The department intends to move the holiday pay calculation reference period for variable hours workers from 12 weeks to 52 weeks. Patricia, from a client survey we undertook businesses strongly supported this one. The rationale and support was that it better reflects normal pay. It avoids those seasonal fluctuations we see.

Obviously, it's consistent with the approach recommended in the Agnew case and it brings Northern Ireland in line with GB where this change was adopted in 2020. So, to me, it's very much a step in the right direction. From an employer's perspective, what do you see as the key operational changes this will require in their business?

Patricia Coulter: Before I come to answer your question, Kevin, maybe if I just acknowledge what you're saying there, certainly there has been a lot of confusion around the reference period for calculating holiday pay for a number of years now. We started off at 12 weeks, then we had the Court of Appeal decision, and they knew where the judge stated that the party should be looking at more pragmatic way to calculate holiday pay that was more representative of the patterns throughout the year and suggested a rolling 12-month period. We then had the working time amendment regulations, which brought the 12-week reference period back on the table and then we had the good jobs bill which is proposing then a 52-week reference period. So it'll be really good to get things settled long last to get some settled guidance on this. So then just to answer your question in relation to the operational changes that's really very much going to depend on the size resources of the employer and also on the working patterns of their workers.

For those, A lot of the employers, the larger employers in particular, will be using software systems to calculate Holiday pay. So, it will be a matter of either adapting or renewing software to reflect the new 52-week reference period, which could mean a potential cost for those employers. But I certainly think it's going to be very welcome news for those employers who have workers both in Northern Ireland and in Great Britain, because having one system to deal with all will certainly make life easier for them.

Kevin Gallagher: Absolutely. And I really welcome clarity on the reference period, but there is a, I would say perhaps an overall feeling that many questions around holiday pay have not been addressed. And perhaps this is somewhat of a missed opportunity to provide certainty in other areas that businesses might need. This aspect of the consultation has probably generated more discussion around what's not included rather than what is. Other potential changes to holiday pay, which were not included as part of this consultation, for example, included in the two-year backstop on holiday pay, which was introduced in GB in 2014, but didn't make its way into the consultation. Changes to address the implications of the Supreme Court's decision in Harper Trust v. Brazel, which seems to have flown under the radar here. Again, not in the consultation and also the potential to legalise rolled up holiday pay for part-year or irregular hours workers, which also wasn't included. These omissions being holiday pay claims of firstly, remain a significant liability for Northern Ireland employers. And there's still uncertainty around these issues. Is that fair to say? Do you have any insight on whether these changes might be introduced or planned in the future?

Patricia Coulter: The issues that you have kind of focused on there, Kevin, are the ones which are troubling employers. It is very difficult sometimes to deal with calculation of holiday pay and leave for casual workers or workers with atypical contracts.

And certainly, we see that through our workplace information service and through the inquiries we receive on that. Just to say that the judgment in the Harper Trust v. Brazel case ruled that the 12.07 % calculation, and that had been a calculation which had been around for years, which was widely accepted as the appropriate method for calculating holiday pay for casual workers. In that case, it was ruled that that should not be used. And then in GB, they introduced the legislation allowing for that to now be used and allowing as you said for the rolled-up holiday pay but there's no such equivalent legislation in Northern Ireland and nor am I aware of any plans to introduce it. So this has left certainly a situation where there is uncertainty on how to deal with holidays in the context of some atypical working arrangements so a difficult issue for employers and that still remains. In terms of the backstop, again, I'm unaware of any plans to introduce this and really with the volume of new legislation which is planned under the Good Jobs Bill with in addition then the amendments to the statutory parental leave regulations which will introduce miscarriage leave and domestic abuse safely also to be implemented. There's already a really busy calendar there so it's difficult to see that this will be coming up in the near future.

Kevin Gallagher: Yeah, I expect that the assembly has its hands full over the next couple of years and maybe one to keep an eye out for in the future. And of course, I suppose we should mention the recent English tribunal judgment on the case of Afshar and Adson Lee, which ruled that the backstop on GB is unlawful. So, I expect the executive will also have to keep an eye out on any developments with appeals and what transpires in that case before. considering that particular aspect further.

Patricia Coulter: Yeah, I think interesting decision and we'll watch that with interest to see if it develops.

Kevin Gallagher: Absolutely. Turning to the proposed statutory code on the right to disconnect, the department has signalled support for a model similar to that introduced in the Republic of Ireland, which promotes an organisational culture in which the line between work and family or personal time is visibly respected and taken seriously. Do you have any insight as to how the code has been working in Ireland? Has there been any substantial practical impact on working practices? Or is it something which we're seeing used to support claims in the WRC?

Patricia Coulter: Okay, so just maybe to talk about the WRC code on the right to disconnect. So when the Minister issued the Way Forward document and she set forward her priorities, the Department noted that the general consensus amongst respondents was that a statutory code on the right to disconnect would strike a balance between protecting employees and supporting economic development and the Minister specifically referenced the support for a model similar to that in the South of Ireland. So, we're looking very closely at that.

That particular code issued by the Workplace Relations Commission was introduced in 2021 and it's described as being a very practical guide for employers and employees in terms of communicating obligations and providing guidance on best practice. Now, having had a look at the WRC website in terms of the decisions, I suppose where it has been used, there have been very few cases have gone through, there's only about 12 or so and only about three of those specifically make reference to the code of practice. So I don't think we've got enough of a basis there to know or to get any substantial idea as to how it's working in practice. And we will watch that as it develops, as more cases come through. But I think what the Code of Practice, has encouraged employers to audit their practices in relation to the right to disconnect, to draft policies which are suited to the particular needs of their own businesses. And very importantly, what it does do, it puts a focus on the training needs of those within the business ensure that everyone involved understands the implications of the right to disconnect and can implement it appropriately.

Kevin Gallagher: Yeah. So perhaps subtle rather than seismic changes arising from that change in Ireland. And obviously it's, it's change has been introduced in other European countries as well, So, perhaps lessons to be taken on board in other jurisdictions. For employers with international clients, those with on-call arrangements or critical incident teams, they'll often need some out of hours responsiveness, how do you think the new code in Northern Ireland can effectively balance those commercial realities with clear boundaries on after hours contact?

Patricia Coulter: Well, looking to the Republic of Ireland code, you'll see, if you have a look at that, you will see that the guidance is very general, and it acknowledges that all businesses will have different requirements in terms of flexibility outside normal working hours. So for example, the code states that employers should engage proactively with employees, their trade unions or other employee reps. So an appropriate right to disconnect policy can be developed and that that policy takes account of the very particular needs of each business and its workforce.

So, the code itself isn't prescriptive in terms of what it says. It gives that scope for flexibility from business to business, depending on their specific needs. So, if we were to follow that approach here in Northern Ireland, that certainly for me would show sufficient flexibility to allow employees, trade union and employer to develop a policy which meets their needs.

Kevin Gallagher: Moving on then to working time record keeping. Patricia, there has been understandable confusion in Northern Ireland in relation to what exactly employers’ obligations are around working hours record keeping. If we cast our minds back to 2019 and the EU's Deutsche Bank judgment, it found that there was a requirement for strict time record keeping. While in GB, the previous conservative government moved to a lighter touch approach where detailed daily records aren't required if you can show compliance with the working time regulations by other means. The Department for Economy has decided not to tighten NI's legal requirements or to adopt the GB model. Instead, the consultation response has confirmed that the position in Northern Ireland will remain a set out in the Northern Ireland working time regulations with the department working with the LRA to develop a guidance to clear up any confusion and uncertainty.
Are you able to provide any indication of what employers can expect from this guidance?

Patricia Coulter: Just to say there, you mentioned that there is guidance already laid out in the working time regulations and maybe it's useful to do a recap on that to see what it actually says at the moment. it states that employers have a duty to keep records in relation to the maximum weekly working time, the maximum working time for young workers and the length of night work. And  it did not include a specific requirement to keep records for daily hours worked. And that requirement really has come under the microscope and was as a result of the Deutsche Bank case that you refer to, which was taken by the Spanish Union CCOO. And in that, just to read from the judgment, the court determined that the introduction of an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured falls within the general obligation for member states and employers. So, following that, as you say, GB decided, well, we're not going to legislate for it. So long as an employer is able to demonstrate adequate compliance in other ways, that's sufficient. In Northern Ireland, again, we've decided not to legislate. But what the department is suggesting is that there is guidance put in place to assist employers really to ensure that they have the adequate information to be able to demonstrate that they are aware and can implement the requirements of the working time regulations. Now, what does that look like? Again, I can't be prescriptive about this at the moment, but it's currently under discussion with the department. We will produce some documentation to assist employers comply with that.

Kevin Gallagher: So, one to keep an eye out for going forward. That's right. The consultation response proposals also extend the right to itemize pay slips to all workers. And they'll require that a breakdown is provided within pay slips where pay varies according to time worked. This is something which is already happening in GB. I expect this is something which is already happening in most organisations anyway. And as part of the wider pay transparency objectives under the consultation. Patricia, Seems to me like a no brainer. Certainly, I know from a client survey we undertook that 92 % of respondents said this wouldn't cause them any difficulties.

Patricia Coulter: Yeah, I think you're absolutely right on that, Kevin. It's probably very long overdue. It's one of the rights that we're playing catch up with GB again. And I think if you look back at the time that the right to itemised pay slips were introduced for employees, we didn't have the range or number of atypical working patterns which now exist. Now with more flexible working arrangements, they're the norm in today's workplace, providing the right to an itemized pay slip to workers and employees and that those pay slips should contain a breakdown of the hours where they vary from week to week. It's going to provide transparency and really, it's going to better serve the needs of everyone in today's workplaces.

Kevin Gallagher: And in keeping with that theme of transparency and protection for some of our more vulnerable workers, if we look at tips and service charge reforms, the changes proposed will require fair and transparent distribution of tips and record keeping, and that this will be supported by a statutory code. It's another area, again, we're playing catch up with GB in Ireland. The proposals I expect would be largely welcomed by hospitality staff in particular, but questions do remain about what constitutes fairness in respect to allocation. For example, should employers use a flat rate model where everyone receives the same, regardless of role? There's potentially some tricky issues which could crop up around this. How do you see the LRA supporting hospitality and other related sectors in implementing, for example, practical trunk rules or more generally helping them to achieve a system under which they provide a fairer distribution and allocation to staff.

Patricia Coulter: Yes, Kevin, so both GB and the Republic of Ireland have their legislation and codes of practice currently in place. And if you look to those codes, you will see that neither of the codes actually sets out an obligation to allocate tips evenly to workers. So you don't have to give the same amount of money to each particular worker. Each of the existing codes provide some guidance on what could be what employers and workers could take into account in terms of how tips will be allocated to look at things like: what hours did they work? Are they part-time? Are they full-time? What seniority do they have? What length of service do they have? What the customer's intention was? What the role and influence of the employee was in terms of providing that customer service? So the guidance is there to provide a bit of a framework as opposed to being prescriptive about everyone getting the same. And fairness is also around don't discriminate. There is maybe a potential in some organisations where there could be indirect discrimination in terms of how tips are allocated.  And fairness is also about transparency So allowing the system to be transparent and allowing people to be able to see the records and see how tips are distributed. What I would say is, you know, the code of practice here will no doubt set out similar guidance, which will help employers and workers alike.

And as with any new legislation proposed, we will provide tailored guidance and training based on code of practice guidance to support the employers with the implementation. And one last thing maybe that I need to mention, just it's not all tips that will come under this. It's really those tips which are under the control of the employers. For example, cash tips wouldn't actually be covered potentially by this.

Kevin Gallagher: Thanks Patricia. More generally for smaller employers who maybe lack in-house HR payroll expertise, where will they be able to turn for practical support as all these changes arising out of the consultation response start to come on stream?

Patricia Coulter: Well, as you know, Kevin, Northern Ireland is a micro small business economy and the Labour Relations Agency have years of experience under their belt, providing support and training and information tailored to their particular needs. It's hard for me to be very prescriptive about what exactly this will look like, but just be assured that preparatory work is progressing. We will be widely promoting and supporting the work of the department as the timetable for the rollout of the new legislation progresses. So watch this space, watch our website. We will be attending conferences, we'll be doing events, will be producing information and publicising that widely as and when it's ready.

Kevin Gallagher: Patricia, thank you very much for those really helpful insights. And thank you for joining us, particularly with all the work that the LRA has to do and the demands on the service, which will be added to by this consultation response. It's clear theme B combines technical payroll changes with culture shaping reforms, particularly around the right to disconnect and transparent pay practices. For employers in Northern Ireland, I would say the key as ever, will be get ahead of the changes, early planning and keep abreast of the forthcoming codes and guidance, which as you said, the LRA will help shape going forward. At Lewis-Silkin, we'll continue to keep track of the legislative progress and any draft codes or regulations as they emerge. 
We'll hopefully see a substantive draft bill in the coming months. So, watch this space. Thanks again to Patricia and thank you to everyone for listening. And please also check out our Good Jobs Hub and dashboard, which outlines all proposals as well as our insights and other podcasts. Our next podcast in the series will cover theme C and explore proposed trade union reform. Please do join us for that. And until then, thank you for listening.