Back
We continue to provide our legal services through the COVID-19 pandemic. Please visit our COVID-19 Hub for legal insights, or contact us directly.
Get in Touch Menu

Laying off staff

06 November 2008

With an uncertain spell in prospect, a number of clients have asked for advice on laying off staff.

One, for example, runs a seasonal business and needs to reduce overheads for a short period in January but does not want to part with capable, experienced staff. Lay offs can be used as a means of riding out such short-term difficulties.

Most employees have no legally-enforceable right to work but employers have no general right not to pay staff because there is no work. If you lay off an employee without pay (unless you have a contractual right to do so) you are in breach of contract. The employee may bring a claim for the breach or for unlawful deduction from wages, or may resign and claim that your action amounted to a dismissal.

As long as the employee agrees to alter the contract terms so that the lay-off is by mutual agreement (eg where the only alternative is redundancy) then you will not be in breach. You should note though that this does not necessarily mean that you can lay the employee off unilaterally without pay in the future: it is likely to be just for this occasion.

If employees agree to the lay-off (or if you decide to take the risk and proceed without their agreement) they will be entitled to a statutory guaranteed payment. Should a lay-off last for four consecutive weeks, or six weeks in a 13-week period, an employee can claim a redundancy payment. Please note, there are particular rules about the notice that must be given. We will be happy to advise on the relevant rules.

As always, if you need commercial and pragmatic legal advice, we’re here to help so please get in touch.

Contact us

Contact
Jenny Hawrot LLB (Hons)
Senior associate, solicitor
View profile
Jenny Hawrot
Related services
Share this article
Resources to help

Related articles

IR35 and the off-payroll working rules

Employment & business immigration

IR35: The (delayed) new off-payroll working rules apply from 6 April 2021 Traditionally, contractors like being self-employed because they pay reduced National Insurance contributions, and are able to set various…

Matthew Clayton MA LLM (Cantab), CIPP/E
Partner

Asda – the Supreme Court’s landmark decision on ‘common terms’

Employment & business immigration

The Supreme Court has made a unanimous landmark decision that (mostly female) shop workers at Asda supermarkets can be compared to the (mostly male) warehouse workers, ruling that they are…

Jenny Hawrot LLB (Hons)
Senior associate, solicitor

Coronavirus Job Retention Scheme guidance & updates

Employment & business immigration

Employment lawyers Matthew Clayton and Jenny Hawrot summarise the latest developments on the Coronavirus Job Retention Scheme to emerge. Thursday 18 March 2021 From 1 April 2021, clinically vulnerable people in…

Matthew Clayton MA LLM (Cantab), CIPP/E
Partner
Contact us