Lay off or short-time working, collectively known as LOST will be available to you as a business / Employer  if you wish to address a temporary shortage of available work without resorting to a redundancy procedure.

Although they are often grouped together, there is an important distinction between the two that is explained below.

Lay off will involve you asking staff to stay at home and not attend work for a temporary period because you aren’t able to provide them with work to do.

On the other hand, short-time working is when you still require your staff to do some work, however, this work is less than their normal contractual hours e.g. 2 days a week instead of 5.

If you are  interested in utilising lay off or short-time working it is imperative that procedures are strictly followed to avoid sleeping walking into a tribunal with dire consequences for all, therefore you must first obtain the employees’ written consent, as trying to enforce LOST without this will be considered unlawful.

It would help if you already have a specific LOST clause within their employment contracts, however, you can always look to gain employees’ consent at the time in question.

Gaining consent may prove difficult as staff is unlikely to take kindly to the idea of a temporary reduction in work and overall pay, however, you should consider persuading staff that this solution is much more favourable to redundancy which may see them lose their job entirely.

It should be noted that your decision to place staff on LOST must be fair and non-discriminatory. Having said this, you are within your rights to decide to place less productive staff on LOST, in favour of the high performing colleagues, to ensure what little work is available is still completed on time.

Whilst placed on LOST, employees with one month’s service will be eligible to receive statutory guarantee pay (SGP) to compensate for the reduction in available work.

Staff will be entitled to SGP for every workless day – this is a day in which they would normally be required to work but aren’t provided with any work by your client.

To calculate SGP you must multiply the normal hours that the employee would have worked on the ‘workless day’ by the ‘guaranteed hourly rate’, However, the most an employee can receive each day is capped at £29.

The payment of SGP is also limited to a maximum of 5 days within any rolling 3-month period.

It is important that you only utilise LOST for temporary work shortages, as employees can resign and claim redundancy pay if they have been placed on LOST for either 4 weeks in a row, or a total of 6 weeks in any 13-week period, and are earning less than half their normal weeks’ pay.

Disclaimer Notice

The information contained in this  article is for general information purposes only and does not constitute advice, Whilst we endeavour to keep the information up-to-date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability for a particular purpose. We recommend that professional advise should be taken from a suitably qualified expert before undertaking any action.

CategoryTax Advice
Subscribe to our newsletter

© 2021 Shaikh & Co is the trading name of Shaikh & Co Limited a company registered in England and Wales Company Number 10372642 VAT Number 262993664.

Shaikh & Co