Making staff redundant
3. Lay-offs and short-time working
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
National and collective agreements can only be enforced if they’re in the employee’s employment contract.
You may also be able to lay off an employee or put them on short-time working:
- where you have clear evidence showing it’s been widely accepted in your organisation over a long period of time
- if you agree with the employee to change their employment contract to allow them to be laid off or put on short-time working (this won’t automatically give you the power to do this without their consent in the future)
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 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.
There’s more advice on lay-offs and short-time working on the Acas (Advisory, Conciliation and Arbitration Service) website.