Greater Manchester Pay and Employment Rights Advice Service Factsheet

Workers are sometimes faced with being laid off or put onto short-time working.  This factsheet is a guide to your rights if you are in this situation. It does not explain every detail of the law and it does not deal with lay-offs and short-time working arising from strikes and other trade disputes.

• Lay off is when your employer does not give you any work in a week and therefore does not pay you.
• Short-time working is when you receive less than half a week’s pay because your employer has reduced the work provided to you.

Employers have no general rights to lay you off or put you onto short-time working unless your contract of employment allows for this. Your contract or written statement may mention lay-off or short-time or it may be custom and practice to do this in your firm or industry. You should check your contract of employment if you have one to see if it allows it.

If your contract does allow lay off and short-time working

Your contract of employment may include a clause which allows your employer to put you on unpaid lay-off or on short-time working at a reduced wage. Even if this is not written down anywhere, this could still be allowed, for example, if it happened before in your company or if it is custom and practice in your industry or trade. Your contract may also state what payment will be made to you during periods of lay-off or short-time working. For example there may be a nationally agreed rate which applies to your industry, or a trade union may have negotiated a rate for your particular company. If the contract does not provide for any payment during lay-off or short-time, you may be able to claim statutory guarantee payments. These are payments which your employer must give you by law in the following circumstances:

Guarantee pay

If your contract allows your employer to lay you off without pay, then providing you have been continuously employed by your employer for at least one month you will be entitled to guarantee pay for five days in any three month period. If the days you are laid off do not follow on immediately from each other, the three month period is worked out separately for each day of lay-off. Guarantee payments are only made for days when you are laid off without work. They are made only for complete working days lost. They are not payable for days when some work is provided even if that is outside normal working hours. Payments are worked out by multiplying the number of your normal daily working hours by your normal guaranteed hourly rate. The maximum daily amount that you can receive is £21.20 (to 31^st Jan 2011, rising to £22.20 on 1^st Feb 2011).

If your employer won`t pay

If your employer refuses to give you guarantee payments which you think you are entitled to, you should first of all send a grievance letter to your employer; see our factsheet on Grievances for guidance about doing this. You also have the right to make a claim to Employment Tribunal within 3 months of the date you believe the payment should have been made.

Claiming a redundancy payment

In certain circumstances, workers who are laid off or put on short-time working can claim redundancy pay. You can only claim redundancy if:

• You have worked for your employer for 2 years or more; and
• You have not had any pay for the time you were laid off; OR
• You got less than half a week’s basic pay (not counting any overtime you normally get) for any week you were on short-time working: AND
• You have been laid off or on short-time working (or a mixture of both) for four week in a row; OR six weeks altogether in any thirteen week period, so long as not more than three of the weeks are in a row;

You can claim as soon as you have reached the four or six weeks which you need to qualify, but you cannot claim later than four weeks after the lay-off or short-time working has ended.  We produce a separate factsheet about this, called Claiming Redundancy if Laid Off or on Short-time Working, which outlines the orocedure you must follow to claim a redundancy payment.

Jobseeker’s Allowance (JSA)

It is possible to claim JSA when you are laid off or on short time working. You must be willing to go back immediately to full time working in your present job and take any casual work within travelling distance of your home. The rules about qualifying for JSA are complicated.  If you want to know more about claiming JSA or Income Support if you are laid off or put on short-time working, you should contact your local Citizens Advice Bureau or welfare rights advice service and ask them to help you work out what the best course of action would be.

If your contract does not allow for lay-off or short-time working

If your employer lays you off or puts you on short-time working when it is not part of your contract, then s/he has breached your contract. See our factsheet Contracts of Employment for more information about your options in this situation. Before deciding what to do, you should consider your options carefully in the light of your personal circumstances, your employer’s situation and how likely you would be to find another job if that became necessary. Your employer may be having financial problems, and your job may be at risk of redundancy. If your circumstances allowed it, you could maybe consider agreeing to reduce your hours for example for a limited time – if you agree this with your employer you should ask your employer to put it in writing and guarantee that your redundancy pay would not be affected at a later date. You must be employed for 2 years or more to qualify for a redundancy payment; see our factsheet Redundancy.

You could decide to accept the changes to your contract - if you do this, you can apply for guarantee payments and state benefits as described above, provided that you meet all the qualifying conditions.

If you need more information about pay and employment rights, contact

Greater Manchester Pay and Employment Rights Advice Service

(  0161 839 3888 phone and answer phone)

or visit our website: www.gmemploymentrights.org.uk

Trade Unions

Trade unions help workers to get better pay and work conditions.

For further information contact us or:

North West TUC, Tel: 0151 236 5432

Greater Manchester Pay and Employment Rights Advice Service is an independent research and information body funded by all local authorities in Greater Manchester under the AGMA grants scheme

Feb 2011