COVID-19: Can I lay off my staff temporarily or cut their hours?

legal updates

If your employment contracts do not contain a clause allowing lay-offs or cuts in hours of work, the contract may be varied by agreement.

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To lay off your employees temporarily without pay or to cut their hours of work, there should be a specific clause in the employment contract.

To support the motor trade, Lawgistics offers the following clause free of charge. This clause is part of HR Manager additional clauses library, aiming to protect the employer’s position.

Lay Off and Short-Term Working

‘The company reserves the right to lay you off or put you on short time working where this is necessary to meet the needs of the business, for example, if there is a temporary downturn in work. There will be no entitlement for you to be paid by the company for any days not worked during a lay-off or short time working period but you may qualify for guarantee pay at the relevant statutory rate. Your continuity of employment will not be affected by a lay-off or short time working.’

If your employment contracts do not contain a clause allowing lay-offs or cuts in hours of work, the contract may be varied by agreement, in writing is highly advisable, so that the suggested clause becomes part of the contract.

If you put your employee on notice of variation and the employee is delaying with returning the signed document but continues working nevertheless, the variation may be deemed as accepted.

The laid off employee may be entitled to the statutory guarantee payment, if this employee has been employed continuously for 1 month, remains available for work, does not refuse any reasonable alternative work and has not been laid off because of an industrial action. The maximum guarantee pay is £29 a day for 5 days in any 3 months’ period, making the maximum of £145.

If an employee has been laid off or kept on short-time for 4 or more consecutive weeks or has been laid off or kept on short-time for a total of 6 or more weeks in a period of 6 weeks, this employee may be entitled to claim redundancy pay provided a notice of intention to claim is served on the employer in the manner prescribed by the regulations.

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