An employer facing financial difficulties may attempt to lay off employees or suspend work for a fixed or unspecified period.
What you are entitled to be paid depends on your contract of employment.
If you are laid off, you are entitled to your normal pay unless your contract clearly allows your employer to pay you something less, or unless you or your union rep negotiates a temporary change to your pay, to respond to a short-term situation.
If your contract of employment does not allow your employer to lay you off without pay, then your employer will be in breach of contract if they do this without your agreement.
Rules about lay-off are often found in a collective agreement incorporated into your contract. Unions can and often do negotiate better terms than the statutory minimum protection the law provides in this situation.
Statutory guarantee pay is based on your normal pay, but there is an upper cap of £29 per day (from April 2019) and there is a maximum of five days’ pay in any three month period.
For part-time employees, the right is pro-rated (i.e. reduced in proportion to your part-time hours).
If you have two years’ service and are laid off for at least four consecutive weeks (or six non-consecutive weeks in a 13-week period) you may qualify for a redundancy payment.
If you agree to any temporary lay-off arrangements that involve a cut in your pay, be sure to record the agreement clearly in writing, making sure you and your employer are both clear in particular that:
- the arrangement is temporary, and exactly when the arrangement is going to end; and
- any redundancy payments, if redundancies turn out to be unavoidable, will be based on your normal pay and hours, before the temporary cut.
See the GOV.UK website for more information on guarantee payments.