What is the Purpose of Short-Time Working?

If your business has a shortage of work, you may want to pursue an option to stop employees attending.

This is particularly important at the moment due to the coronavirus pandemic. During this time, you may feel the need to limit employee responsibilities.

At present, lay-off and redundancy are considerations. But you may also want to think of  short-time working—we’ll explain this for you in the rest of this guide.

But, if you need quick answers to your questions, you can refer to our coronavirus business resource centre.

Or you can contact our 24-hour HR advice line if you need immediate guidance with this topic: 0800 028 2420.

What is short-time working?

It’s when an employee receives less work. And, consequently, less pay.

This can be useful for your business in the event there’s less work available. Or if more serious events are taking place—such as with the coronavirus pandemic.

UK employment law and short-time working

The main area you need to remember is you can’t force an employee into this.

You must get their consent to go ahead. If you don’t, this can result in claims for a breach of employment contract.

But only if there’s not a lay-off and short-term working clause in their contract. If there is, what’s outlined there needs to be followed. If you don’t, you follow the process as you outlined below.

So, before going ahead you should make sure your employee is okay with the development. If you do, then you can go ahead.

But you’ll need to provide them with written confirmation—there’s a template letter for this further below in the guide.

Ultimately, short-time working and redundancy are in much debate at the moment due to the coronavirus pandemic.

You should consider your options between them. But also take into consideration the UK government’s Job Retention Scheme—we detail this later in the guide.

How does short-time working work?

You make the decision to place employees on fewer hours. So they’ll receive less than half a week of pay. You can pursue this option if:

• You have a clause in an employee’s contract of employment. This will explain that you can go ahead with this arrangement if you require to, which the employee will have agreed with on signing their contract.
• There’s an agreement in your industry to allow it.
• There’s a trade union and workplace agreement.
• You and your employee agree to change their contract.

If you agree to change the contract, you have to provide the employee with plenty of warning. In this case, it’s within one month of the change.

And you should confirm this change in writing—send the letter over to the employee and provide a copy of their updated contract.

Short-time working rules in the UK—a breakdown

You need to be aware there are strict rules you must follow. You should be also mindful of current employment laws in the UK.

If you don’t manage the situation properly it can lead to claims for breach of contract and/or constructive dismissal.

So, it’s essential to understand a couple of key points about the process:

1. You can ask your employee to stay at home if there’s no work.
2. Lay-off and short-time working aren’t the same thing. The second option is when an employee’s hours are cut. Lay-off is where they’re off work for at least a week.
3. You’ll need to pay the employee their normal wage in either situation. That’s except if you have an employment contract stating the employee can take a reduced wage—or they must go with no pay.

Short-time working contract clause

You can request employees not to arrive at work. But you must still pay them.

For short-time working, if you have a specific clause in your contracts of employment then you can have temporary leave without any pay.

However, you must receive consent from your employees. For example, if they sign their employment contract with your business.

The reasons for short-time working

It may seem like a good option for your business due to a number of reasons.

For example, a factory may receive a smaller order than usual and only require its staff to work for a reduced number of hours.

Generally, you can only put your employees on short-time working arrangements if there’s a short time working contract clause in their contract of employment, or taking this action is normal over a long period by custom and practice.

Construction firms, as another example, may have issues from outside factors such as the weather. So, they may regularly use the practice of placing employees on LOST.

You should bear in mind that, in the absence of an express or implied contractual term, your employees would have entitlement to full pay during a short-time working period.

That’s even when they aren’t working.

How long can short-time working last?

There’s no limit—this can continue indefinitely.

Just be aware that employees can claim voluntary redundancy, or redundancy pay, if the period of time is beyond four weeks (consecutively).

Short-time working—notice periods

This will depend on notice periods, as you online them in an employment contract.

When issuing a short-time working notice period, you should distribute a letter confirming this is the route you’re taking with your employee.

Use the letter to outline a number of areas to them. Such as:

• How long you expect this to last for.
• What you’ll pay them during this time.

You should also make them aware of their holiday entitlement during short-time working. But it shouldn’t affect their usual statutory entitlements.

You should also provide normal wages for all time worked. Guaranteed payments in short time-working don’t apply here, but may do so in a lay-off situation.

In the event of redundancies

When considering LOST, you should always be aware of lay-off and short-time working and redundancy.

So, if you place your employees on short-time working where their pay for a week worked is less than half a week’s pay, or it lays them off for an entire week (or both), the employee may be eligible to request a redundancy payment.

Employees will be able to do this if they’ve worked for two years or more with your business.

Plus, if they’ve had a period of lay-off or short-time working for four or more consecutive weeks or a total of six weeks in any 13-week period.

In these situations, you can issue a counter-notice to resist this but can only do so if they anticipate that normal working is about to restart.

Short-time working as an alternative to coronavirus-related redundancies

During the coronavirus pandemic, it’s important your business considers all available options.

Although it may appear all you can do is process redundancies, there are several options you have available. These can help ensure talented employees stay within your business. And they include:

• Laying-off staff.
• Offering unpaid leave.
• Offering short-time working.
• Referring to the government’s Job Retention Scheme.

You’ll need to review your business situation to understand the right choice. But it’s essential right now to remember you have these options available to you.

These are alternatives that ensure you can keep employees on your workforce.

With short-time working due to coronavirus, you can reduce the role the employee plays in your business. At least for the time being.

But you’ll, of course, need to gain their consent before you can move ahead.

As we mention above, you should also take into consideration the UK government’s Job Retention Scheme.

At present, this allows your business to furlough employees—you can make a claim for this. It covers 80% of the employee’s normal wages. This ensures you, and your workforce, receives financial support.

It can also mean you don’t have to make redundancies.

However, if you still have work you’d like completing, it may not be the right choice for your business.

Furloughing staff means they mustn’t complete any work. And they have to be on this type of temporary leave for at least three weeks.

So, consider your options with this carefully. You may want to offer support to your employees with the 80% wage coverage—but, if your business still needs to meet productivity requirements, short-time working is a good option.

Short-time working letter template

You can use this letter as a sample for any employees who’ll take this change to their hours.

Just be aware, this is a template letter confirming short-time working —so, you should adapt it to meet the requirements of your business situation.

*Sample letter*

[Company name]

[Date]

Dear [employee’s name],

After recent discussions, this is a letter to confirm you will take short-time working from the [date]. Your hours will face the following reductions [explain the amount].

Further to this, you acknowledged this during a meeting with [manager’s name].

This is a temporary situation. And we will confirm to you, in writing, once we intend for your role to return to your normal hours.

If you have any questions during this time about the matter, you should contact our HR department. They will be happy to assist you.

Yours sincerely,

[Manager’s name]

[Signature]

*End of sample letter*

Looking for help?

If you need any advice with working arrangements at the present time, you can contact us for expert support. Our teams provide 24/7 HR advice which is available 365 days a year. We take care of everything when you work with our HR experts.

Want to find out more? Contact us on 0800 028 2420 and book a free consultation with an HR consultant today.