COVID-19 : Short Time Working and Lay off – how does it work?

With lots of questions about short time working and lay offs (LOST), here is some information to help with your planning.

Short Time Working
This is where you reduce working hours, for example reduce a 5 day week to 3 or 4 days. Where you do so, you are effectively varying the contract of employment. Pay and leave entitlement will be pro-rata’d accordingly. Please see below on Consent.

Lay-offs
This is where you have no work to provide staff so you ask them not to come to work. A lay-off is a complete workless day. Where you lay off, staff are entitled to claim from you a Statutory Guarantee Payment (SGP) which is currently £29 per day (increases to £30 in April). It can only be paid for up to 5 days in a 3-month period (£145 in total).

Unlike redundancy, the employment contract continues and is not terminated, therefore there being a job to return to when possible.

There is no limit to how long you can lay someone off for however, once it is longer than 4 weeks in a row or 6 weeks in a 13-week period, they can claim redundancy and redundancy pay.

To be eligible for SGP, they must have been employed continuously for 1 month (includes part time workers), be available to work, not unreasonably refuse alternative work and not have been laid off due to industrial action.

Do you have contractual consent?
Whether you can use LOST depends upon their contract of employment. If there is a LOST clause in the contract, then you can use it and don’t need consent. By its very nature, there is no prescribed notice, but as much notice as you can give the better.

If there is no clause in the contract, legally if you enforce it, it will be a breach of contract. In this situation, you need to consult with staff and seek their consent. Why would they consent? If the alternative is dismissal via redundancy, then they may consent.

Once consent is given (or if you are relying on a contractual clause), put the changes in writing.

Please remember, although these are unprecedented times, employment law still applies.

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