In the current economic environment, lay-offs are an unfortunate fact of life.
You can lay off an employee (ask them to stay at home or take unpaid leave) when you temporarily can’t give them paid work – as long as the employment contract allows this.
Short-time working is when an employee works reduced hours or is paid less than half a week’s pay.
Laying off staff or short-time working can help avoid redundancies – but you have to agree this with staff first.
This could be in:
- their employment contract
- a national agreement for the industry
- a collective agreement between you and a recognised trade union.
It is appreciated that employers do not readily resort to this step and some industries are more susceptible than others. Used indiscriminately they can damage employee relations in a workplace which can have an impact on a business for a very long time.
Statutory guarantee payments
Employees are entitled to these if you don’t provide them with a full day’s work during the time they’d normally be required to work.
The maximum payment is £25 a day for 5 days in any 3 months (ie £125). If employees usually earn less than £25 a day, they’ll get their usual daily rate. For part-time workers, the rate is worked out proportionally.
Employees can claim a redundancy payment (https://gov.uk/staff-redundant/redundancy-pay) from you if the lay-off or short-time working runs for:
- 4 or more weeks in a row
- 6 or more weeks in a 13 week period, where no more than 3 are in a row
They must give you written notice in advance that they want to make a claim.
You don’t have to pay if they’ll return to normal working hours within 4 weeks.
If you don’t give guarantee pay to someone who’s entitled to it, they could take you to an employment tribunal (https://www.gov.uk/being-taken-to-employment-tribunal-by-employee).
There’s more advice on lay-offs and short-time working on the Acas (Advisory, Conciliation and Arbitration Service) website. (https://www.acas.org.uk/index.aspx?articleid=814).
Employers should ensure that they keep their employees informed of what is happening and the likelihood of the lay-off being lifted as this can have serious implications for employers should they have laid off staff for a long period of time and then suddenly work picks up.
If the employer has not kept staff in the loop it is likely that they will start to look elsewhere for employment of decide to ask the employer to make them redundant.
So what are their rights if they decide that they no longer wish to be employed?
If an employee has been laid off for a period of 4 weeks or 6 weeks in a 13 week period, they can write to the employer to claim redundancy.
If the employer has work that the employee can do and:
- the employer responds to the employee within 7 days of receipt of the letter
- they can guarantee that the employee can return to work within 1 month of receipt of the letter
- they can further guarantee work for a period of 13 weeks.
The employer can refuse the redundancy payment.
If the employer does not fulfil the above, the employee is entitled to redundancy.
For more information on how to deal with lay-offs and/or redundancy issues, Contact Us to support you through the process.
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