Layoffs & Short-Time Working (Including Redundancy)

Overview

Your employer can ask you to stay at home or take unpaid leave if there’s not enough work for you.

A lay-off is if you’re off work for at least 1 working day. Short-time working is when your hours are cut.

 

Coronavirus Job Retention Scheme

Announcements on Friday 20th March 2020 for businesses indicated that the government would support all UK employers to continue paying part of their employees’ salary, for those who would have been otherwise paid off.

Full disclosure of what this will mean for employees and the process that employers need to take to claim this grant funding is yet to be announced by the government, however, the premise is that the UK Government will be funding 80% of employee salaries up to a cap of £2,500 per month.

More information on the coronavirus Job Retention Scheme can be found HERE

 

How long you can be laid off?

There’s no limit for how long you can be laid off for or put on short-time working. You can apply for redundancy and claim redundancy pay if it’s been:

- 4 weeks in a row

- 6 weeks within a 13-week period

 

Lay-Off Pay Entitlement and Short-Time Working Payments

You should get your full pay unless your contract allows unpaid or reduced pay lay-offs.

If you’re unpaid, you’re entitled to guarantee pay.

 

Guarantee Pay

Rate and length of statutory lay-off pay:

You’re entitled to guarantee pay during lay off or short-time working. The maximum you can get is £29 a day for 5 days in any 3-month period - so a maximum of £145.

If you usually earn less than £29 per day you’ll get your normal daily rate.

If you work part-time, your entitlement is worked out proportionally.

You cannot claim guarantee pay for any day that you do some work.

 

Eligibility for Statutory Lay-Off Pay

You must:

- have been employed continuously for 1 month (includes part-time workers)

- reasonably make sure you’re available for work

- not refuse any reasonable alternative work (including work not in your contract)

- not have been laid off because of industrial action

 

Statutory Lay-Off Pay & your Employment Contract

Your employer may have their own guarantee pay scheme. It cannot be less than the statutory arrangements. If you get your employer’s payments, you do not get statutory lay-off pay on top of this.

Not paying guarantee pay counts as an unlawful deduction from your wages - you could make a claim to an employment tribunal.

 

Applying for Redundancy

You could apply for redundancy and claim redundancy pay if you’ve been laid off without pay or put on short-time and receive less than half a week’s pay for:

- 4 or more weeks in a row

- 6 or more weeks in a 13-week period

What to do:

1. Write to your employer to claim redundancy within 4 weeks of the last day of the lay-off or short-time period.

2. Your employer has 7 days to accept your claim or give you a written counter-notice.

3. If your employer does not give you counter-notice, you can assume they’ve accepted your redundancy claim.

4. A counter-notice means your employer expects work will soon be available - it must start within 4 weeks and must last at least 13 weeks.

Your employer can withdraw their counter-notice in writing.

 

Resigning

You must resign to get redundancy pay. The timing is crucial - you have 3 weeks to hand in your notice, starting from:

- 7 days after you gave written notice to your employer (if you did not get a counter-notice)

- the date your employer withdrew their counter-notice

 

Extra work or Claiming Benefits

You can take on another job while you’re laid off or on short-time (unless your contract says you must not).

You should:

- get your employer’s agreement

- make sure you’re not working for a competitor

- make sure you’re available for your original job once the lay-off or short-time ends

 

Benefits you can claim

You may be entitled to Universal Credit or ‘new style’ Jobseeker’s Allowance (or both) while you’re laid off or on short-time.