Lay-Offs and Short-Time Working

When employees are not given any work by their employer and the situation is regarded as temporary, they are regarded as 'laid off'.

Where the lay-off amounts to dismissal, the employee may be entitled to Redundancy Pay or, subject to certain conditions, they may be able to complain of unfair dismissal to an Employment Tribunal.

In What Circumstances Can Employers Lay Off Their Workforce?

Where there is an expressed contractual right agreed between an employer and its employees. Alternatively, there may be an agreement covering this issue between the company and the trade union or a national agreement within the industry which the employer follows. Such agreement has contractual force only if it is incorporated into the employees' Contract of Employment.

The right of an employer to lay off may also be implied if it can be shown by clear evidence that the custom and practice of laying off staff has been established over a long period.

Employers are legally able to tell employees not to turn up for work because there is no work available but there is no general right not to pay them because work isn't available.

Both parties may agree to alter the contract terms so that any lay off isn't a decision taken solely by the employer but one of mutual agreement (e.g. where the only alternative is redundancy). However, this does not mean that there has been a variation in the employee's contract and that he/she can be laid off at will in the future.

Do Employees Have Any Right to Pay and How Long Can a Lay Off Last?

Employees can be laid off without pay if that is stipulated in their contract. However, they may be entitled to a statutory guaranteed payment from their employer, usually limited to a maximum of 5 days within any 3 month period.

On days when a guaranteed payment is not payable, an employee may be entitled to Jobseeker's Allowance.

How long a lay off can last is determined by the terms within the employment contract. However, the employee may, in some cases, be able to give their employer written notice of their intention to claim a redundancy payment.

What is Short-Time Working?

Short-time working occurs when employees are laid off for a number of contractual days each week or for a number of hours each working day.

As in the case of a lay-off, an employer must have an expressed or implied power in order to reduce the amount of pay lawfully. Normal practice would be for the employee or union to agree to short-time working as an alternative to redundancy.

Where there are no express rights of the employer, an employee may claim that the employer's action amounted to a dismissal and complain to of an unfair dismissal to an employment tribunal. They may pursue a claim for loss or deduction of wages.

Employees placed on short-term working may be able to claim Jobseeker's Allowance for the balance of the hours they do not work.

Can a Claim For Redundancy Payment be Made as a Result of Being Laid Off or Put onto Short-Time Working?

If an employee is either laid-off (i.e. receives no wages) or is put on short-term working (i.e. receives less than half a day's pay for 4 consecutive weeks or for 6 weeks in any 13 week period) because of a shortage of work, the employee can give written notice of their intention to make a claim for a redundancy payment.

Advice on eligibility can be obtained from your local Jobcentre.