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Lay-off & Short-time Working Contracts UK Guide

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Part ofUK Employment Law Guide for Employers (2025)

Written by Brad Askew Solicitor (non-practising)
Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice.
Updated June 2026 · England & Wales
When a business hits a quiet patch, sending staff home without pay or cutting their hours can feel like an obvious way to manage costs. The catch is that neither option is automatically available to an employer. Unless the employment contract says otherwise, withholding work and pay can quickly turn into a breach of contract or even an unfair dismissal claim. That is why proper lay-off and short-time working wording matters so much, for both sides. This page walks through what these terms actually mean under UK employment law, what workers are entitled to during quiet periods, and the point at which a prolonged lay-off can trigger a redundancy claim. It is written for employers thinking about adding these clauses and employees trying to work out where they stand.

What this document is

A lay-off and short-time working clause is a contractual provision that gives an employer the right to reduce or pause an employee's work, and their pay, when there is not enough work to keep them fully occupied. A lay-off means the employee is provided with no work at all for a period, and receives no wages during that time (though statutory payments may still apply).

Short-time working is the middle ground: the employee still works, but their hours are cut to the point where they earn less than half a week's normal pay. Crucially, an employer cannot simply impose either of these arrangements. The right to do so has to be built into the contract itself, usually at the point of hire, or agreed separately with the employee in writing.

Without that contractual foundation, stopping pay or slashing hours amounts to a fundamental breach, and the employee may be entitled to resign and claim constructive dismissal, or bring an unlawful deductions claim for the missing wages.

How to use this document

  1. Check what the existing contract says. Before doing anything else, look carefully at the current employment contract and any staff handbook. If there is no express clause allowing lay-off or short-time working, you cannot lawfully impose one. Adding the right later needs the employee's written agreement.
  2. Draft clear, specific wording. The clause should spell out when lay-off or short-time working can be triggered, how much notice will be given, how pay will be handled during the period, and how long the arrangement may last. Vague drafting tends to cause disputes down the line and can undermine the clause entirely.
  3. Communicate the position in writing. When the time comes to rely on the clause, tell affected employees in writing. Explain why the reduction is happening, which days or weeks are affected, what pay (if any) they will receive, and how you will keep them updated. Open communication reduces the risk of grievances.
  4. Handle Statutory Guarantee Pay correctly. Eligible employees who are given no work on a normal working day may claim a Statutory Guarantee Payment for a limited number of workless days within any rolling three-month period. Current rates and limits are published on gov.uk and should be checked before each payroll run.
  5. Track the duration carefully. Keep accurate records of every week an employee is laid off or on short-time working. Once the period reaches the statutory threshold (four consecutive weeks, or six weeks out of any thirteen), the employee may be entitled to serve notice claiming statutory redundancy pay. Missing that trigger can be expensive.

Common questions

If you're dealing with this kind of situation, speak to an experienced legal adviser who can walk you through it — from £89.

Common questions

Q Can my employer lay me off without pay in the UK?
Only if your contract, or a separate written agreement, gives them the right to do so. Without that express term, stopping your pay is usually a breach of contract and you may have grounds to claim unpaid wages or resign and argue constructive dismissal. Even where a lay-off clause exists, you may still be entitled to a Statutory Guarantee Payment for workless days, subject to the usual eligibility conditions.
Q What counts as short-time working?
Short-time working happens when an employer reduces an employee's hours or available work so that they earn less than half of a normal week's pay for that week. It is different from a simple shift change or a minor cut in overtime. Like a full lay-off, short-time working can only be imposed where the contract allows it or the employee agrees in writing to the new arrangement.
Q How long can lay-off or short-time working last before I can claim redundancy?
You can serve notice of an intention to claim statutory redundancy pay once you have been laid off or kept on short-time working for four or more consecutive weeks, or for any six weeks within a thirteen-week period (where no more than three of those weeks are consecutive). Strict timing rules apply, and written notice must reach the employer within four weeks of the qualifying period ending.
Q What is a Statutory Guarantee Payment?
It is a minimum payment that certain employees are entitled to when their employer provides no work on a day they would normally work. It is capped at a set daily amount and limited to a maximum number of workless days in any three-month period. Current figures are published on gov.uk. The payment does not apply to every situation, and some categories of worker are excluded.
Q Can the employer refuse my redundancy claim?
Yes, within strict limits. After receiving the employee's written notice, the employer has seven days to serve a counter-notice contesting the claim. The counter-notice must set out a reasonable expectation that, within four weeks, normal work will resume and continue for at least thirteen unbroken weeks. If the employer cannot meet that standard, the redundancy claim usually stands.
Q Do I still accrue holiday during a lay-off?
Generally, yes. Employees retain their statutory rights, including the accrual of paid annual leave, for as long as the employment relationship continues. A lay-off pauses the work but not the contract itself. Any contractual holiday above the statutory minimum depends on the wording of the agreement, so it is worth checking the specific terms that apply.
Q Is a lay-off the same as being made redundant?
No. A lay-off is temporary and the employment continues, with the expectation that work will return. Redundancy is the permanent ending of a role because the employer no longer needs it. A prolonged lay-off can, however, give the employee the right to treat the situation as a redundancy and claim statutory redundancy pay once the statutory thresholds are met.
If you're dealing with this kind of situation, speak to an experienced legal adviser who can walk you through it — from £89.

Sources

This guide is based on primary UK law and official guidance.

Brad Askew, Solicitor (non-practising)

Written & reviewed by

Brad Askew Solicitor (non-practising)

Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice. LegalDocuments.co.uk is not a law firm and does not provide regulated legal advice.

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Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.