Financial & Legal News

An Employment Update on lay offs and short time working

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We are being contacted by businesses seeking advice on what to do if they suffer a downturn and have insufficient work for their employees. There are murmurings that the Government may bring in emergency changes to the law on lay off and short time working, but as with everything else this is a rapidly changing situation.

Our employment team have put the following information together and have been updating our clients personally on a daily basis:

The latest Employment Updates:

You as an employer can require your staff to stay at home or to take unpaid leave if there has been a reduction in work and there is not enough work for the employee to do.  So what does it mean?

  • A “lay off” is if you require the employee to stay off work for at least one working day.
  • “Short time working” on the other hand is where employees are required to attend work on their normal working days but to work reduced hours.
  • There is no limit for how long an employer can lay off an employee or put an employee on short time work.
  • The pay entitlements under guaranteed pay up until the 6th April 2020, are £29 a day and that is limited to 5 days in any 3 months.
  • The payments after the 6th April 2020, we expect to increase to £30 a day.
  • If you put somebody on short time working, the employee cannot claim guaranteed pay for that day.
  • If someone earns less than £29 per day, they will receive their normal daily rate and if an employee works part time, their entitlement is worked out pro rata.

For employees to be eligible for the statutory lay off pay, the employee must:-

  • have been continuously employed for at least one month
  • they must be available for work
  • not refuse any reasonable alternative work (including work not in their contract).
  • not have been laid off because of industrial action, ie. strike.

For an employer to rely on the benefits of lay off or short time working, there must either be a contractual right in the employee’s employment contracts or it must be in an industry where lay off could be relied on by the employer as “custom and practice”.

As Head of Employment Law Susan Mayall explains;  “In normal circumstances, if an employer lays off an employee or puts him/her on short time working without having an express or implied contractual right to do so, this may amount to a fundamental breach of contract leaving the employee entitled to resign and claim constructive dismissal.

Whilst I cannot guarantee that an employee is not going to pursue such a route, my view is that it would not be reasonable to award compensation in these circumstances.

Whilst lay off and short time working may help employers, there is a risk in them that subject to an employee following the labyrinth like notice provisions, an employee can claim a redundancy payment under the lay off or short time provisions,” she added.

The basic features of the scheme are as follows:-

  • If an employee has been laid off or kept on short time (or a mixture of the two), either for 4 or more consecutive weeks or for a total of 6 weeks (no more than 3 being consecutive) in any period of 13 weeks, the employee can give the employer a written notice of intention to claim.
  • If the employer wishes to contest liability, then it must serve a written counter notice within 7 days of service of the employee’s notice of intention to claim.  Subject to the employee complying with the written notice requirement, an employer can only avoid making the redundancy payment at this stage if at the date of service of the employee’s notice of intention to claim, there is a reasonable expectation of a return to normal working within the next 4 weeks.
  • If the employer has served and not withdrawn a valid counter notice, then the employee’s avenue of redress is to apply to an Employment Tribunal to decide the matter.
  • If the employer fails to serve (or serves and then withdraws) a counter notice or if a Tribunal upholds the employee’s claim, the employee must terminate his or her contract of employment by giving either 1 week’s, or their contractual, notice whichever is the longer within 3 weeks.

“It is clear from the above that the provisions to claim a statutory redundancy payment under the lay off regime are complex and if you receive a notice of intention to claim from an employee, I advise you to take separate legal advice on this,” warns Susan Mayall.

Annual leave

Another options are to require staff to take annual leave giving the required notice if you have this provision in your employment contracts.  If not, you could discuss with staff them taking holidays rather than being laid off.

Sending people home from work

Another question we are being asked about is whether if somebody presents at work as feeling unwell, how you should deal?  If anyone has the Coronavirus symptoms, they should not be attending work and they should follow the Government guidance on self-isolation.

If people are required to work at close proximity to others and other employees are concerned that work colleagues have cold like symptoms, it would be reasonable to require the person presenting with symptoms to either go home and self-isolate, or if they felt well, to work from home.  Government guidance is that staff wherever possible should be being encouraged to work from home.

Consideration also needs to be given to the Government’s reference to people who may be more susceptible to the dangers of the infection and this is a wider range of people than those who are traditionally protected by having protected characteristics under the Equality Act 2010.  These people include pregnant employees, people who have the flu jab or have pre-existing medical conditions or are undergoing treatment, say chemotherapy.

Whilst not wanting to put a run at the pharmacies on them, the purchase of a head thermometer may be a useful tool in determining whether or not someone should remain in work or whether they should be sent home.

“If you are sending staff home to self-isolate, they should receive either the Government introduced sick pay from day one or if your business offers company sick pay, payment should be made in accordance with that.  The definition of “persons deemed incapable of work” for the purpose of (statutory) sick pay entitlement now includes a person who is isolating himself [or herself] from other people in such a manner as to prevent infection or contamination with Coronavirus disease in accordance with guidance and who by reason of that isolation is unable to work,” adds Susan.

“This does not however mean that a household member who is self-isolating because of the sickness of a household member will be automatically entitled to company sick pay as of a right.”

“It is a worrying time for anyone and I am sure most employers want to do the right thing by their staff, the news is changing daily and I would recommend ACAS website for updates”

“Finally, we wish that you all stay safe and if you do have any queries, please contact myself Susan Mayall.”

Contact our employment team on 0161 785 3500, we are here to help you through this crisis or email us on

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.

Written by Susan Mayall


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