Short Time and Layoff Guidance Sheet
An employer can ask employees to stay at home or take unpaid leave if there’s not enough work.
- A lay-off is defined as when an employee is off work for at least 1 working day.
- Short-time working is when and employee’s hours are reduced.
Before introducing lays off or short time working, employers may also consider the following options, (ensuring agreeing with employees first);
Take holiday
- Work from home
Work more flexibly
- Take unpaid leave
How Long Can Employees Be Laid Off For?
There’s no limit for how long an employee can be laid off or put on short time but employees can apply for redundancy and claim redundancy pay if the following criteria has been met:
- 4 weeks in a row
- 6 weeks in a 13-week period
Introducing Short Time or Lay Offs
Employees are entitled get full pay unless their contract allows unpaid or reduced pay lay-offs.
Employers can also lay off an employee or put them on short time working:
- where the employer has clear evidence showing it’s been widely accepted in the organisation over a long period of time
- If the employer agrees with the employee to change the employment contract to allow them to be laid off or put on short-time working (this will require the consent of the employee and could be formalised in a “change to terms and condition” letter)
If the contract allows or consent has been given to impose unpaid or reduced pay layoffs the employee is entitled to “guarantee pay”
Payments
Employees are entitled to guarantee pay during lay off or short-time working. The maximum they can get is £30 a day for 5 days in any 3-month period – so a maximum of £150. If they usually earn less than £30 a day they would get their normal daily rate. If employees work part-time, their entitlement is worked out proportionally.
Employees cannot claim guarantee pay for any day that they do work.
To be eligible for statutory lay off pay employee’s must:
- Have been employed continuously for 1 month (includes part-time workers)
- Reasonably make sure they available for work
- Not refuse any reasonable alternative work (including work not in their contract)
- Not have been laid off because of industrial action
Employers may have their own guarantee pay scheme which cannot be less than the statutory arrangements. If employees do get this they cannot claim statutory lay-off pay on top of this.
Redundancy
Employees can apply for redundancy and claim redundancy pay if they have been laid off without pay or put on short-time and received less than half a week’s pay for:
- 4 or more weeks in a row
- 6 or more weeks in a 13-week period
They will need to write to the employer to claim redundancy within 4 weeks of the last day of the lay-off or short-time period. The employer has 7 days to accept the claim or give a written counter-notice. If the employer does not give counter-notice, the employee can assume the redundancy claim has been accepted.
A counter-notice means the employer expects work will soon be available and it must start within 4 weeks and must last at least 13 weeks. An employer can withdraw their counter-notice in writing.
Resigning
Employees must resign to get redundancy pay. They have 3 weeks to hand in their notice, starting from:
- 7 days after they gave written notice to the employer
- The date the employer withdrew the counter-notice
Extra Work or Claiming Benefits
Employees can take on another job while they are laid off or on short time (unless the contract says otherwise)
Employees should:
- Get the employer’s agreement
- Make sure they are not working for a competitor
- Make sure they available for their original job once the lay-off or short-time ends
Employees may be able to get Universal Credit or ‘new style’ Jobseeker’s Allowance (or both) while they are laid off or on short-time.
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