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Redundancy Layoff and Short Time Working

There may be times when your employer struggles to find enough labour for all the workforce. That means you could be 'laid off' from work or given 'short-time working' hours or unpaid holiday.

LAYOFFS: Generally, laying off staff and introducing short-time working is a temporary situation.

Being laid off from work means you should take unpaid leave or stay at home. This is also a good time to check the terms and conditions of your contract.

Employers can lay off staff, but only when the employment contract permits it. Even so, you may qualify for redundancy pay depending on your individual situation.

Trade union members can get further advice about layoff and short time work from their union representative. Or, you can discuss your concerns with any knowledgeable colleagues at your company.

There is a difference between layoff and short time working rules.

Being laid off work for at least one (1) working day is a layoff. Working reduced hours, or getting paid less than half of one week’s pay, is short-time working. As a rule, employers use these measures to help avoid making staff redundant.

That said, they will need to agree the action plan with their staff first. There are several ways employers can do this, such as in:

  • The terms and conditions of an employment contract.
  • A national agreement made by the industry.
  • A collective agreement between your company and a recognised trade union.

Note: Enforcing national and collective agreements can only occur when they are in the employment contract.

There are other circumstances that allow laying off an employee or putting them on short-time working. Examples include:

  • Situations where there is clear evidence showing wide acceptance in your organisation and over a long period of time.
  • Circumstances where you change an employment contract. You must get their agreement before you do this. The contract would then allow them to get laid off or put on short-time working. This is not an automatic process that gives you power to repeat this in the future without their consent.

Statutory Guarantee Payment from the Employer

There are situations where employees will qualify for statutory guarantee payments. It happens when employers cannot provide a full day of work during their normal working time.

The maximum statutory guarantee payment from the employer is £31 a day for five (5) days in any three (3) months (e.g. up to £150).

Employees earning less than £31 a day will usually get their regular daily rate. There is a proportional rate used in the calculations for part-time-workers.

Note: Guarantee pay does not apply to any day that you carry out some work (e.g. working for half a day).

In some cases employees will qualify for a redundancy payment from their employer. It happens in cases where the layoff or short-time working runs for:

  • 4 or more consecutive weeks (in a row).
  • 6 or more weeks in a 13 week period (if not more than 3 are in a row).

Staff who want to make a claim for redundancy pay must give written notice to their employer. The notice must be in advance of any claims received.

But, redundancy payment is not mandatory if there will be a return to normal working hours within 4 weeks. Read more on layoffs and short-time working on the Acas website.

Note: Failing to give statutory guarantee payment to staff who qualify for it would count as an unlawful deduction from their wages. In this case, the action may end up at an employment tribunal.

Redundancy Layoff and Short Time Working Rules in United Kingdom