Friday, 20 March 2020 12:26

Lay-offs, Short-time Working and Redundancies

Unsurprisingly this week, the majority of calls have concerned how employers should manage staff and the available options following a sudden and unexpected downturn in business. For many there is a fine line between being able to come to a reasonable and acceptable solution for everyone and the business closing completely. If you’re suffering at this time, we hope we can help you to make the right decisions.

We’ve included details of the options available but before you make any decisions, we think you should hold fire until the Government announces its businesses support packages which is promised for later today.

First of all, Coronavirus and the effect it is having on the country is 24/7 news so your staff may already be expecting bad news if you’ve experienced a notable downturn in business. The important thing is to be open, upfront and honest without causing alarm. It’s better that news comes from the owners and managers of a business than from the rumour mill.

If you think that you’re going to have to make reductions in the workforce, your options are:

Lay-off: You need to explicitly have a lay-off clause in your contracts to enable this. You would use it when there is no work at the moment, but you potentially expect it to return. You’ll need to pay a maximum lay-off payment of £29 per day for five days, so up to £145. Staff are still employed and continue to accrue holiday but any pension contributions for example would be reduced in line with pay. Staff are allowed to undertake other work with your agreement and can ask for redundancy if lay-off continues for four weeks.

Short-time working: This is where you reduce the number of working days per week and you’ll need a clause in your contracts for this too. You may for example reduce from five to three days per week. You would reduce pay accordingly, so in this example, to 60%. You would similarly reduce other benefits including holiday accrual and pension contributions. Again staff can find other work with your say-so.

If you do not have either of these clauses in your contracts, you can implement them provided you come to a mutual agreement with your team. You may need to stipulate that you need 100% buy-in from staff so that conflict is avoided.

Forced Holiday: You can stipulate that staff take their paid holiday. In order to implement this, you need to give twice as much notice as the holiday taken, so for two weeks holiday you’ll need to give four weeks’ notice.

Dismissal of short-term employees: If you reach the stage that you really need to let staff go then those with less than two years’ service will be the obvious first choice. You’ll only need to pay them their notice period plus any accrued holiday unless your contract states otherwise.

Redundancy: If drastic measures are called for and you have to lose staff who have more than two years’ service then you’ll need to make them redundant. Follow a proper selection procedure if it doesn’t apply to everyone and remember that it’s always the position that is made redundant and not the person.

This is top-line information only and each case will be different and require explicit advice so if you need further support and letter templates, please contact us on 01452 331331 or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it.


Read 1657 times Last modified on Friday, 20 March 2020 13:49
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