Lay-Off and Short Time Working
A shortage or work, or a temporary lull in business is not an uncommon feature for many employers. However how to manage such events can be tricky.
Staffing is one of the first concerns that employers will likely need to address, particularly when cost savings need to be made.
Lay-off and short-term working arrangements are therefore popular with employers looking for a solution to a temporary issue, rather than the more permanent option of redundancy.
Lay off: A lay-off situation arises where you are temporarily unable to provide work for your employees. Lay-off could result in work halting and no pay in relevant roles, alternatively it may be a pattern such as one week on, one week off, or working three out of four weeks.
Short-time: A short-time situation arises where, due to a reduction in the amount of work available, you reduce employees pay or hours to less than half their normal weekly amount.
Redundancy
An employee who has been laid-off or placed on short-time for four or more consecutive weeks, or for an aggregate total of 6 weeks in a 13 week period, can give written notice (through the form RP) to their employer indicating their intention to claim redundancy.
Upon receipt of such notice the employer can:
- Accept and pay the redundancy lump sum thereby accepting that there is a termination of employment
- Counter notice within 7 days, confirming that within 4 weeks the employee will be employed for a period of 13 consecutive weeks.
Notifying Employees of Use Lay-off or Short-time Working
As an employer you do not have an automatic right to lay-off employees or place them on short-time working. To do so without having an express term in the contract of employment, or without an established custom and practice, may well be seen as a breach of contract, particularly if agreement is not reached with effected employees. You may also be at risk of constructive dismissal claims or payment of wages claims.
Employers who feel their business is subject to fluctuating workloads are well advised to include a lay-off and short-term clause as standard in their contracts of employment.
Additionally, good communication is highly recommended. Informing staff of the situation will not be pleasant, but they should receive clear and honest communication from management. Failure to do so will more than likely result in an extremely disengaged, unmotivated workforce, particularly when they return to normal working.
There is no minimum notice required for lay-off or short-time, however employees should be given as much notice as possible, to allow them organise their own financial situation.
Once the final decision has been made, employees should be formally notified using the Form RP9.
Bright Contracts - Employment Contracts and Handbooks
