I have a clause in my contract saying I can be laid off or put on short-time working, what does this mean?

Last updated: 06 Aug 2020

A temporary lay-off is where the employer says there is no work for an individual to do and they are told not to work and will not be paid, but their employment contract continues. Short time working is when the employer has less work for the individual to do and reduces their hours and pay.

If an individual’s contract of employment has an express clause regarding lay off or short-time working (LOSTW), the employer may invoke these clauses and they will not be in breach of contract if they cut pay or hours. These clauses have been fairly rare outside of manufacturing and construction, but are being considered now by a range of other employers.

If an individual is laid off, the law provides that employees are entitled to a guarantee payment of £30 per day up to a maximum of 5 days of guarantee payments.

Can I claim a redundancy payment?

The right to claim a redundancy payment only applies if you are laid off or on short-time working for either:

  • 4 weeks in a row, or
  • 6 weeks in a rolling 13-week period.

To claim redundancy the employee must give the employer a ‘notice of intention to claim’ (NIC).

This NIC must be:

  • given within 4 weeks of the last day of the 4 or 6 week of lay-off or short time,
  • in writing, and
  • state the intention to claim a redundancy by reason of lay-off or short time.

If the employer intends to resist the claim for redundancy they must serve a counter notice to the employee stating that they contest the claim. This must be issued in writing within 7 days of the NIC.

The employer can only resist the claim for redundancy on the ground that there is a reasonable expectation of:

  • work for the employee commencing within 4 weeks of the NIC, and
  • the work is expected to continue for at least 13 weeks.

If, in fact, the employee is kept on lay off or short time during the four week period following the NIC the employer’s defence will automatically fail.

The employee can bring a claim to the Employment Tribunal for a redundancy payment if the employer rejects their application.

Finally to be entitled to the redundancy payment the employee must resign. This must be done by the giving the correct notice of termination. The notice period must be either one week, or any longer period that applies in the contract.

The notice must be given within:

  • 4 weeks of the NIC if the employer does not serve counter notice
  • 3 weeks of the service of notice of withdrawal of any employer’s counter-notice, or
  • 3 weeks of an employment tribunal judgment that the employee’s claim succeeds.

These page is designed to give general information about members’ rights on returning to work. It does not cover all circumstances and should not be treated as a definitive answer. Members should contact Prospect either through the Member Contact Centre on 0300 600 1878 or contact their union rep or full-time officer for specific advice.