“I’ve been laid off” is an expression that is sometimes used to colloquially refer to redundancy. However, a lay-off is actually a temporary measure that may be used by employers in certain circumstances when there is not enough work for their employees to do. A lay-off is when an employee is sent home temporarily, and short-time working is where an employee’s working hours are reduced, and both may be an alternative to redundancy (our recent blog here discusses other options for potentially avoiding redundancy).
Employers do not have an automatic right to lay employees off or put them on short-time working, unless there is some provision for it. This could include a clause in the contract of employment, an agreement with a trade union or on an industry-wide basis, it is an established practice, or a specific agreement between the employee and employer is reached to vary the terms of the employment contract.
Employees are entitled to full pay for short-time working or a lay-off, unless their contract makes provision for reduced pay, or an agreement is made. If an employee is unpaid, they are statutorily entitled to guarantee pay as follows:
- A maximum of £30 a day for five days in any three-month period (i.e. £150);
- Or if the employee usually earns less than £30 a day the normal daily rate with apply;
- Or if the employee works part-time, their entitlement will be worked out proportionally.
For employees to be eligible for guarantee pay, they must have been employed by the employer for at least a month, and should make themselves available for work, including any reasonable alternative work. They must also not have been laid off due to industrial action.
Employees who have been laid off or put on short-time working may be able to undertake other paid work during that time, however, this is subject to their employment contract, which may prevent certain things such as working for a competitor. The employee also needs to ensure that they are available to return to their original job once the lay-off or short-time working ends.
Lay-offs are not a long term solution, however, as employees who have been laid off for four or more weeks in a row, or six weeks in a 13-week period, are entitled to apply for redundancy and claim redundancy pay.
In recent months the Coronavirus pandemic has seen the introduction of furlough leave and the job support scheme (more information about this available here). As these initiatives are government funded, employers may have made use of these where needed, rather than statutory guarantee pay. However, with furlough leave ending on 31st October 2020, and the job support scheme on 30th April 2021, these options are not available indefinitely. As such, if your employment contracts do not include a lay-off or short-time working clause that includes statutory guarantee pay, this may be something you wish to consider adding in consultation with your employees.
If you are an employer and would like to discuss lay-offs and short-time working in further detail, please contact a member of the ViewHR team.