Lay offs and short-time working

Unfortunately there may be times when you do not have enough work for your employees to do.

The first word that probably springs to mind is redundancy.

But it may be just a temporary dip, therefore the best option may be to lay them off or put them on short-time working.

Lay offs

It will be considered a lay off if the employee is told to stay at home for at least one working day.

Typically, you can only lay them off if there is an express provision in the employee’s Contract of Employment which allows this.

If you do not have a provision in the contract, you can see if there are any collective agreements in place which permits lay offs or whether you can get the employee to agree in writing to being laid off. An employee may be more receptive if they understand that it is an alternative to redundancy and it is only a temporary measure.

How much the employee is paid will be set out in the Contract of Employment. If the employee is not paid, they may be able to claim ‘guarantee pay’. Subject to certain eligibility requirements, guarantee pay consists of a maximum of £26 a day for 5 days in any 3 month period.

Short-time working

Short-time working is when you cut their hours and reduce their wages accordingly. For example, they are sent home early each day.

Again, you can only put an employee on short-time working if the Contract of Employment expressly permits this or there is a collective agreement in place or they provide their written consent.

Limits

The duration of the lay off or short-time limit will depend on what is set out in the Contract of Employment. If you lay them off for a longer period than what is allowed in the contract it will be considered a breach of contract.

Redundancy

If they have been laid off for 4 weeks in a row or 6 weeks in a 13 week period, they can give written notice that they are going to claim a redundancy payment. The employer can reject the claim if there is a reasonable chance that normal working hours will be resumed within four weeks.

If you are considering implementing lay offs or short time working, seek legal advice to avoid costly claims. Our Employment Law Advisers can provide you with guidance and support.

Director of Legal Services

James Tamm

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We combine the service quality of a law firm with the certainty of fixed-fee services to provide expert, solutions-focused Employment LawHR and Health & Safety support tailored to employers.

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We combine the service quality of a law firm with the certainty of fixed-fee services to provide expert, solutions-focused Employment LawHR and Health & Safety support tailored to employers.

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We combine the service quality of a law firm with the certainty of fixed-fee services to provide expert, solutions-focused Employment LawHR and Health & Safety support tailored to employers.

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