What happens if a water pipe bursts in your premises and you can’t open your business? Or a shipment you’ve been waiting for has been delayed, leaving you with inadequate supplies? What if adverse weather prevents you from operating? What will you do with your employees during this time? Do you have to pay them while your business is closed? Keep reading for all you need to know about lay off and short time...
Lay off and short time occurs in periods of time where there is either no work (lay off) or where the work has been diminished (short time). This cessation/diminution in work is expected to be temporary in nature.
Lay off
Lay off occurs when an employee whose contractual pay depends on them being provided with hours of work by the employer is not provided with those hours and as such isn’t entitled to that pay.
The employer becomes unable to provide the work but believes that this cessation is only temporary. The employer must provide the employee with prior advanced notice of the cessation.
Short time
Short time occurs when there has been a diminution in either the hours of work or remuneration so that the employee will be paid less than one half of their normal weekly remuneration or work less than half of their normal weekly hours.
The employer must reasonably believe that this diminution in work or pay is temporary, and must provide the employee with prior advanced notice of the diminution.
Policies
It’s important to note that employers don’t have an automatic right to place an employee on lay off or short time. However, an employer can argue a right to apply LOST through contractual clauses and through custom and practice.
Where there’s a contractual policy in place, the employer can apply the LOST principles even where the employees are not in agreement. The policy should state that the period of time the employee will be without pay – if it doesn’t, the employee may be able to claim arrears of wages.
If your employment documentation does not currently contain a provision on LOST, it would be advisable to add one in.
Similarly, it’s also advisable to add to your adverse weather policy that if the business cannot open due to severe weather, then the employees will be placed on temporary layoff.
Make sure you issue all employees with a contract/handbook amendment letter reflecting these changes, and have them sign and return the letter.
Steps in the LOST process
- Identify if the cessation/redundancy is permanent or temporary.
- Identify if a selection process is required.
- Is there a LOST contractual policy or custom and practice?
- Call relevant employees to a meeting.
- Explain the LOST rationale and the impact it will have on the employees. In this meeting, alternatives to LOST should be explored.
- The employer must issue the employees with confirmation of LOST in writing (RP9 Form)
In certain circumstances, an employee who is on LOST will be able to claim redundancy if they give their intention to do so in writing within four weeks of:
- The end of a continuous period of LOST of 4 or more weeks duration, or
- The end of a period of 6 or more weeks LOST out of 13 weeks (where no more than 3 weeks were consecutive)
The employer may be able to counter this claim for redundancy with an offer of 13 weeks of continuous work.
If you have any questions in relation to lay off or short time, please contact our expert employment law advisors on the 24 Hour Advice Service on 0818 923 923
