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Temporary Lay-Offs

Temporary lay-offs can happen when an employer does not have enough work for their employees to do. Employees who are temporarily laid off do not attend work, but still have all their usual employment rights.

When an employer is short of work, it is not uncommon for members of staff to be temporarily laid off and asked to stay at home, not working. During the period of being laid off, the employee is still possessed of their employment rights, including the right to be paid - these are not lost simply because you are not currently attending the workplace.

If the employee is working on a temporary basis or under a zero hours contract, they do not have a right to be paid, and so this would not be considered a lay-off under the definition used by employment law.

In the event that an employer asks an employee to work some of the week, but is laid off for a day or more in that same week, then the employee is on 'short-time' working, meaning the hours of work are cut.

Time limits for lay-offs

There is no upper limit for the amount of time an employee can be laid off for, as is the case with short term leave. It is possible that an employee is eligible for receiving redundancy pay if they are laid off unpaid or put on short-time working for four consecutive weeks, or six weeks within a 13-week period. After this, an employee should consider leaving or claiming redundancy pay.

Lay-off pay

In the event that an employee is laid off, they should receive full pay for the period of the lay-off unless their written employment contract specifies otherwise.

You can agree to change your contract if a contractual paid lay-off would be preferable to a redundancy offer.

When entering into a contractual agreement to undergo an unpaid lay-off, the agreement should be written and a time frame should be agreed, and you may also want to enquire as to whether changing your mind later down the line will be possible to ensure flexibility on this issue if the circumstances should change. An alternative is to take some paid annual leave as a temporary solution.

Once you have been laid-off for either over four weeks or six weeks in a 13-week block, you could consider leaving and claiming redundancy pay.

You should make a claim for redundancy within 4 weeks of the lay-off or short-time working beginning. Your employer will then have a week to respond.

Statutory guarantee pay

If an employee is contractually laid off without pay they are still eligible for statutory guarantee pay. Guarantee pay is payable as long as the employer:

  • has been employed continuously for a minimum of one month
  • makes a reasonable effort to be available for work
  • does not refuse reasonable alternative work (which can be work outside of their contract)
  • was not laid off due to industrial action

In the event that unpaid lay-offs aren't allowed under an employment contract, the employee has rights to full pay during a lay-off period. However, they are able to accept less.

The maximum amount of guarantee pay currently available is £26.00 per day for 5 days over any 3-month period, adding up to a total of £130 – though if you would usually earn less than this, you will be paid at your normal rate instead.

Statutory guarantee pay can only be paid when you do no work that day, and obviously will not be paid if your employer already has a guarantee pay scheme in place to which you have access.

Working elsewhere

Unless your contract forbids it, you might wish to try and pick up some work elsewhere while laid off or on short-time working. Before doing so, you should make sure your employer is okay with this, and avoid working for competitors to your current employer.

You also need to make sure that you will be available to return to your usual hours once the period of lay-off or short-time comes to an end.

If you are unable to find work, you may be entitled to receive Jobseeker’s Allowance during this time, although you must still look for work.

When an employee is being treated unfairly and laid off unjustly, they may feel that they have been constructively dismissed, and could be able to claim unfair dismissal against their employer. Breaches of your contract or of employment law in general may permit for this claim, or another, to be made.

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