Conor Murphy vacating the minister for the economy seat for pastures new in Seanad Éireann gives us the opportunity to survey Northern Ireland’s employment landscape.
When the political institutions returned in February last year, Murphy made ‘Good Jobs’ one of his four priority areas for the economy, pledging to overhaul employment legislation in Northern Ireland.
His Good Jobs Bill is currently in limbo. The public consultation for the Bill closed in September , but little movement on it has been visible since. In the meantime, the announcement of the new UK Government’s first budget appears to have spooked the labour market.
The headline measures from that announcement have been well covered by now, with increases to employer national insurance contributions and both national living and minimum wage rates placing a particular squeeze on businesses in Northern Ireland, who did not benefit from Covid-era supports as their counterparts in Great Britain did.
These changes to the cost of doing business and employing people are also likely to affect the Northern Ireland economy more than that of England, for example, as ours is heavily reliant on SMEs, who tend to operate on smaller margins with less headroom for major changes to expenditure.
Recent statistics released by the Department for the Economy show there were 803,000 employees in Northern Ireland in December 2024, a 0.3% decrease from the previous month, which is the largest decrease in employment numbers since August 2020.
While December’s figure was still a 0.6% increase on the December 2023 figures, the reoccurrence of a significant monthly decline for the first time since 2020 may be one of our first official signs that employers in Northern Ireland have been discouraged from increasing staff numbers by the budget.
I have also seen this in practice with an increasing number of clients seeking support with redundancy processes, both large and small.
Still, the officially reported redundancy numbers do not as yet reflect any significant increase, with both proposed and confirmed redundancies in October and November 2024 following the budget being fewer than the figures in September 2024 before the cost increases were announced.
However, with the feeling on the ground and the contracting number of employees, it will be interesting to see how things shake out in the coming months.
Developments such as the Employment Rights Bill, which will likely to make significant changes to employment legislation across the water, also have the potential to create further divergence and confusion amongst employers and employees locally.
It is crucial that the announcement of Murphy’s successor brings with it clarity on Good Jobs, our own direction of travel, and does not further shake confidence in the market.
- Ian McFarland is partner at Eversheds Sutherland
