Following Monday’s emergency COBRA meeting, the Government says that widespread transmission of coronavirus in the UK is now "highly likely” and the Prime Minister suggested that home working could be instrumental in preventing the further spread of the virus.
But what happens where employees are unable to work from home, for example in the manufacturing sector, and the volume of work diminishes due to an interruption in the supply of component parts or a reduced demand?
Briony McDermott, solicitor in the employment team at Wake Smith looks at the issue.
She said: “Generally speaking, where there is a reduction or diminishment in work of a particular kind, this would give rise to a redundancy situation, however as an alternative, an employer may wish to deal with an unexpected downturn in its business by laying off employees or putting them on short-time working, which unlike dismissal, is a temporary solution to the problem of a reduction in work.
“An employee is deemed to be laid off if they are not given any work at all for a week.
“An employee is deemed to be put on short time working if their weekly pay is reduced to less than half as a result of a reduction in hours worked.
“In order to lay employees off or put them on short time working, an employer must have the express contractual right to do so.
“This means that the contract of employment must contain a clause stating that employees can be required to stay away from work, or accept a reduction in hours on a temporary basis.
“The clause should also reserve the right to reduce pay according to the reduction of work.
“If there is no contractual right to lay staff off or put them on short time working, it may be possible to agree this with them as a short-term measure and an alternative to redundancies, however it is likely that staff will be resistant to this.
“Employees on whole days of lay off are entitled to receive statutory guarantee pay for a maximum of 5 days in a 3 months. Statutory guarantee pay is a nominal amount and is currently set at £29 per day.
“There is no maximum length of time employees can be laid off or put on short time working however if the situation carries on longer than is absolutely necessary it may be considered unreasonable and could allow employees to resign and bring a claim for constructive dismissal.
“In situations where an employee has been laid off or put on short time working for 4 continuous weeks; or 6 weeks in a period of 13 week period with no more than 3 consecutive week, an employee can look to resign their position and claim the statutory redundancy payment.
“If an employer foresees providing the employee with work lasting 13 weeks which will start within the following 4 weeks of the intention to claim a redundancy payment, the employer can serve a counter notice which will nullify the employee’s intention to claim a redundancy payment.
“If you do not already have the flexibility to lay staff off or put them on short time working, looking to incorporate a clause allowing this is one of the things that should be considered during your periodic contracts review.”
If you would like to discuss your contracts of employment then please contact Briony McDermott in Wake Smith’s employment law team on 0114 266 6660.
