Lay off and short time working

The economic effects of the coronavirus virus means many employers will faced a downturn in business and have to make costs savings. Alternatives to redundancy can be found such as putting staff on reduced hours or asking them not to attend work. Here’s some Q and A’s in relation to laying off staff and placing them on short time working which you might find helpful.

Q: What is short-time working?

A: It is where an employee has been put on short-time working for a week by reason of a reduction in the work under the contract of employment or the employees pay for the week is less than half a week’s pay.

Q: What is lay off?

A: It is where the employer does not provide work of any kind for the employee.

Q: Does the contact of employment make provision for short term working or lay off?

A: If yes this will enable the company to implement the process without being in breach of contract. If not It will be in fundamental breach of contract entitling the employee to resign and claim constructive dismissal.

Q: Is there an obligation on the employer to provide work?

A: Only if there is a clause in the contact which states this, normally the obligation is to pay wages.

Q: How long a period can employees be laid off?

A: Four weeks in a row or six weeks in a 13-week period.

Q: What do I pay staff who are laid off?

A: Staff are entitled to a Statutory Guarantee Payment which is currently set at a maximum daily rate of £29.00 (up to 6 April 2020), per day a total of £145.00 within a thirteen week period.

Q: Can I still make the employees redundant if I can’t find alternative work? Can my staff claim a redundancy payment?

A: Yes. If the employee has the qualifying service and decides to resign and claim constructive dismissal they may be able to claim a statutory redundancy payment.

Q: How should I deal with this?

A: You have seven days to accept the claim or to give a written counter-notice. If the counter-notice is issued it means you expect the employee to be available and work will be provided within four weeks, for a minimum of thirteen weeks.

Q: What happens to an employee’s holiday entitlement during a period of lay-off?

A: Employees will still continue to accrue annual leave during the lay-off period. Where an employee is temporarily laid off, they can choose to take paid annual leave instead of being laid off, in which case they will be paid their normal rate.

Written by June Salmon – Bates Wells & Braithwaite – 01787 880440

These are just a few of the considerations that may assist you with a decision on how to temporarily downscale your workforce. For further advice and discussion on this topic please contact our employment solicitor or 01787 880 440

June Salmon

June joined Bates Wells & Braithwaite in 2015 and is a specialist employment law solicitor.

June has over 20 years of litigation and employment law expertise gained first in private practice and later in her role as an employment lawyer in a local authority in London where she dealt with highly complex tribunal cases including TUPE matters, sex, race and disability discrimination claims.

Outside of work June is a governor of a local sixth form college and enjoys a busy family life.


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The Directors of Bates Wells & Braithwaite