There are always employment worries in times of crisis, such as the current Coronavirus pandemic. But what are the alternatives to redundancies?
Alternatives to redundancies
Lay Off and Short Time Working
In difficult economic times, such as associated with the current coronavirus crisis, employers may see a significant drop in the amount of work available for employees to do; in some cases this may reduce to nothing.
Instead of taking the drastic step of making redundancies, employers may be able to use ‘lay off’, or short time working’. However, the rules must be fully appreciated.
Temporary Downturn Of Work
Lay off and short time working are methods employers can use when there is a temporary period of no, or a reduced amount of, work to do whilst maintaining the continuous employment of employees. Where work has ceased or reduced significantly for good, redundancies may be the only option.
‘Lay off’ means providing employees with no work for a full day. ‘Short time working’ is where hours are still provided but these are less than normal.
Any employee can be selected for lay off as there is no obligation to apply a selection criteria, however the employer must be aware of any form of discrimination or detrimental treatment when choosing who to lay off or put on short time working.
A decision to lay off should therefore be made following a fair process of implementation i.e. consultation, warning and proper explanation, and an employer may benefit from applying a selection criteria in order to avoid any suggestion that the decision amounted to a breach of the implied term of mutual trust and confidence and entitled the employee to resign and claim constructive unfair dismissal. This situation will be different however, where wholesale lay off of staff is being proposed.
Contractual Wording Is Important
In order to enforce lay off or short time, you must have the express contractual right to do so. This means having wording within the contract to the effect that you may require employees to stay away from work or require that their hours of work are reduced. The clause should also reserve the right to reduce pay according to the reduction of work.
If there is no such right in the contract, you can attempt to agree with employees the introduction of the clause at the time to place them on lay off or short time in order to preserve their employment, however, this move may face some resistance.
Statutory Guarantee Payments
Employees are entitled to these payments if you do not provide them with a full day’s work during the time they’d normally be required to work.
The maximum payment is currently £29 a day for 5 days in any 3 months (i.e. £145 in total). If employees usually earn less than £29 a day, they’ll get their usual daily rate. For part-time workers, the rate is worked out proportionally.
Redundancy Payments
Employees can claim a redundancy payment from an employer if the lay-off or short-time working runs for:
- 4 or more weeks in a row
- 6 or more weeks in a 13-week period, where no more than 3 are in a row
Employees must give an employer written notice in advance that they want to make a claim for a redundancy payment.
An employer does not have to pay a redundancy payment if they’ll return to normal working hours within the next four weeks.
Where possible, it’s always best to try and find alternatives to redundancies.
For assistance on any aspect of Employment of HR including avoiding redundancies agreements, contact our expert, friendly team today.