Short-time working

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

In this guide, we explore the process you can follow to do this. But remember, you can call our 24-hour HR advice line if you need immediate guidance with this topic. 

What is short-time working?

Also called lay off and referred to “LOST”, it’s an option you can use when there’s a shortage of work. Lay off occurs when you need to ask employees to stay at home and not attend work.

Short time working occurs when the employer requires employees to work fewer hours than their normal contracted hours and therefore take home less pay.

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

Short time working that you don’t manage properly can lead to claims for breach of contract and/or constructive dismissal

The reasons for short-time working

It can be due to a number of possibilities. For example, a factory may have received 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 and may regularly adopt the practice of placing its employees on LOST.

You should bear in mind that, in the absence of an express or implied contractual term, your employees would be entitled to full pay during a short time working period even when they aren’t working.

When issuing a short time working notice, employers should distribute a letter confirming short-time working to its employees.

Use the letter to outline a number of areas to them, how long you expect this to last for and what you’ll pay them during this time.

You should make them aware of their holiday entitlement. Short time working shouldn’t mean affect their usual statutory entitlements.

You should also provide normal wages for all time worked. Guaranteed payments do not apply to short-time working, but may apply 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.

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 lays them off for an entire week (or both), the employee may be eligible to make a valid request for 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.

Looking for help?

For any assistance with your workforce, you can get in touch with us for expert guidance. Call us now on 0800 028 2420.

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