Lay-offs & Short-time Working UK: Rights & Pay

Overview

A lay-off, in the employment law sense used in the UK, is not the same thing as a redundancy. It means a period where the employer provides no work and pays no wages, while the employment contract continues to run.

Short-time working is similar in principle, but the employee still does some work: their hours or pay drop to less than half of a normal week. Both are only lawful if the employee's contract allows them, or if the employee agrees to the arrangement.

Without a contractual right or clear agreement, stopping work and withholding pay could amount to a breach of contract or unlawful deduction from wages. Even where lay-offs or short-time working are permitted, employees keep most of their employment rights, including continuity of service, holiday accrual and protection from unfair dismissal.

In certain situations, employees are entitled to statutory guarantee pay for workless days, and after a qualifying period of lay-off or short-time working, they may be able to serve notice and claim a statutory redundancy payment.

Key steps

1. Check your contract first. Look at your written employment contract, staff handbook, or any collective agreement to see whether the employer has an express right to lay you off or put you on short-time working without pay. If there is no such clause, the arrangement usually needs your agreement before it can lawfully go ahead.
2. Understand what you should be paid. On workless days during a lay-off, eligible employees can receive statutory guarantee pay for a limited number of days in any rolling period. The daily rate and cap are set by the government and change over time, so check gov.uk for the current amount rather than relying on older figures.
3. Keep records of your hours and pay. Note the dates you are laid off or placed on short-time working, the hours you actually work, and what you are paid for each week. These records matter if you later need to claim guarantee pay, redundancy, or challenge an unlawful deduction, as the figures decide which rights apply.
4. Know when you can claim redundancy. If you have been laid off or kept on short-time working for a set number of consecutive or cumulative weeks, you may be able to give written notice that you intend to claim a statutory redundancy payment. Strict time limits apply, and the employer can serve a counter-notice, so the timing needs to be handled carefully.
5. Raise concerns in writing. If you believe the lay-off or reduction in hours is not permitted by your contract, or that you have not been paid what you are owed, put your concerns to your employer in writing. Keep copies of everything, and consider using the internal grievance procedure before looking at a tribunal claim.