Can I lay staff off or reduce their hours during the coronavirus emergency?

I have received a lot of queries from clients in the last week asking if they can lay some staff off or put them on to short term working, as they are not busy and they have heard that the airlines have laid people off. Here are some of the frequently asked questions.

What is meant by lay-off and short-time working

Lay off. This occurs when you don’t have any work for your employees but wish to retain their employment, but they are unpaid and are not required to carry out any duties.

Short-time working. This occurs when you have some work but less than normal and don’t require the same amount of time from the employee and the employee is paid less than half a normal week’s pay.

As a result of the coronavirus emergency we are not as busy, can I lay staff off like the airlines have?

Unfortunately, unless you have a clause in your employment contracts allowing you to lay people off for a short period or place them on short term working, you have no legal right to do so. However, I would caveat that and say this is subject to any emergency legislation the government may to change this, but at the time of writing this was not the law.

If you need to lay people off for a short time to get through the public health emergency you can ask employees to agree to being laid off or kept on short-time working, but you will need their consent to go ahead with this action. Employees may be prepared to accept a period of lay-off or short-time working if they are aware that the alternative could be redundancies.

Subject to satisfying the eligibility conditions and their contracts of employment, employees who have been laid off or put on short-time working may be entitled to receive a statutory guarantee payment and/or to claim a statutory redundancy payment.

Are employees who are Laid off or on Short Time Working entitled to receive any payments?

If you have the contractual right allowing you to lay staff off without pay or put them on not short time working, they are not entitled to be paid. However, staff might be entitled to a statutory guarantee payment from you, limited to a maximum of five days in any period of three months. The daily amount is subject to an upper limit which is currently £29 per day off. On days when a guarantee payment isn’t payable, employees might be able to claim Jobseekers Allowance and should contact their local Jobcentre office about eligibility.

Can an employee claim Redundancy payment?

If your contracts allow you to place an employee on to short time working or who is laid off they may be entitled to claim a statutory redundancy payment. To be able to claim a redundancy payment they must give you notice of their intention to claim a redundancy payment within four weeks of being laid off or kept on short-time working for four or more consecutive weeks, or a series of six or more weeks (of which not more than three were consecutive) within a period of 13 weeks.

An employer may contest it has any liability to pay the employee a redundancy payment if it serves a written counter notice within seven days of service of the employee’s notice of intention to claim.

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