Lay-offs and short-time working.

Support for employers during COVID-19 who may have to consider lay-offs, reducing hours or pay, or even issue redundancies. 

Due to the unparalleled spread of Coronavirus, employers are facing rapidly evolving changes to HR and employment practices. While some employers may be able to continue to operate with their employees working from home, others unfortunately may suffer a serious downturn in business, with some difficult outcomes, as detailed in the options below.

Lay-offs versus short-time working

Lay-offs occur when an employee receives no pay for a particular week because there is no work for them, even though they are available for work. 

Short-time working occurs where an employee’s working hours are reduced with a corresponding reduction in pay because of a shortage of work.

Where specific terminology is not included in an employment contract allowing employees to be laid off or placed on short-time, an employee must agree in writing to the change in contractual terms, prior to any changes being implemented. Failure to obtain an employee’s agreement to the change will render the employer open to claims of a breach of contract.

What does this mean for your employees? 

Employees who are laid off and not in receipt of their normal pay, may be entitled to a 'statutory guarantee payment' of up to £29 a day from their employer. This is limited to a maximum of five days in any period of three months. On days when a guarantee payment is not payable, employees might be able to claim Jobseekers Allowance from Jobcentre Plus.

Employees can apply for redundancy and claim redundancy pay if they have been laid off or placed on short-time for four consecutive weeks or for six weeks in a 13-week period (where not more than three weeks were consecutive). 

The government has also announced a set of temporary measures aimed at supporting businesses during the current unprecedented situation. One of these measures is the establishment of the Coronavirus Job Retention Scheme, the aim of which is to assist employers in retaining staff who have had their jobs frozen during the pandemic, rather than making the roles redundant.  

Other alternatives

Employers can tell their employees when to take holiday if they need to. For example, they could decide to shut for a week and for everyone to use their holiday entitlement. If the employer does decide to do this, they must tell employees before, at least twice as many days as the amount of days they need people to take. For example, if they want to close for five days, they should tell employees at least ten days beforehand. 


As with any change affecting the workplace, it is beneficial to have a two-way communication system in place to ensure everyone is kept abreast of developments and to enable your employees to voice their opinions. If you think you will need to implement lay-offs or short-time working, it is important to talk with your employees as early as possible and throughout the process, to alleviate concerns.

This article was last updated on 31 March 2020.

Speak to an expert

COVID-19 continues to challenge employers on several different fronts, should you require any support or guidance on how this may affect your organisation and the actions you should take, please get in touch using the form below.

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