Sickness Related Lay Offs - What is Acceptable?
LUKE HUTCHINGS >
Employment Law PartnerThu 19 March 2020
Our Employment team have been busy fielding a number of calls from clients who own businesses and are considering shuttering all, or part of, their business due to a fall in demand linked to the unexpected outbreak of Coronavirus (COVID-19).
These businesses want to know if they can lay off staff or put them on “short hours” temporarily until that demand recovers. Each situation is very different, and a lot will depend on the contract wording that each business uses for its employees.
Generally speaking, employers do not have a right to lay off in law. Therefore, laying employees off is not possible unless there is an express clause in the contract (for each employee who is laid off or put onto shorter hours) permitting it. The contract should be signed by the employees in question. If there is no express contractual clause permitting the employer to lay staff off, this can only be done with employee consent (for each affected employee).
Staff who are laid off may be entitled to claim statutory guarantee pay from the Government, but this only available for five days in any rolling three-month period. The maximum daily pay rate is £29.00.
We suggest arranging a meeting with the employees and encouraging them to see things from the business perspective. For instance, in some cases, if not enough employees agree to accept the temporary measure, the business could fail, and nobody wants that. Stress the situation is extraordinary and temporary. Employees will continue to accrue holiday during the period and if they need an uplift in earnings during the lay-off, they could use their holiday entitlement.
Without the express contractual right, or employee consent, it would be unwise for an employer to attempt to lay staff off. In a small number of industries and sectors (such as construction work), lay-off is a well-known and traditional occupational hazard; employees largely accept this could happen to them when entering into the profession. Only in these cases might there be an implied right for an employer to be able to lay off staff without written agreement.
Making changes or variations to employee working patterns can be a very sensitive thing to do, and you should take appropriate legal advice before making any changes to employee pay or hours.
Altering hours in the wrong way is a shortcut to losing a claim in the Employment Tribunal. We would always recommend, and particularly in these anxious times, for business and the labour force to pull together. It is better to reach a mutual understanding about these arrangements, which will hopefully apply for a limited period of time.
Please contact Luke Hutchings at our Peterborough Office on 01733 865636 or click here to read more about our Employment Law services.
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