Lay-offs and Short-time Working

In defined circumstances, employees may be able to claim statutory redundancy payments if they have been laid off work or placed on short-time working.

A lay off occurs where an employee is not provided with any work by the employer in any given week with the result that the employee is not paid at all for that week.

Short-time working occurs where, due to a reduction in the amount of available work, the employee works and is paid for less than half a week.

Under the Employment Rights Act 1996, an employer will only be entitled to lay an employee off or place them on short-time working if the employee’s contract contains a clause authorising the employer to do so, or if the employee expressly agrees to the lay-off or short-time working at the time.

An employee will be eligible for a redundancy payment if they:

•           have been laid off or kept on short-time working for four or more consecutive weeks, or for a series of six or more weeks (of which not more than three were consecutive) within any 13 week period

•           give the employer proper notice to terminate their contract of employment

•           give written notice to the employer indicating their intention to claim a redundancy payment in respect of lay-off or short-time working.

The employer may, in defined circumstances resist a claim for redundancy pay by serving a written counter-notice on the employee within seven days of receipt of the employee’s notice of their intention to claim a redundancy payment. The circumstances in which the employer may do this are where the employer reasonably expects (within four weeks of the employee’s notice) to be able to provide the employee with full-time working, ie with no further lay-offs or short-time working, for a period of at least 13 weeks.


What happens if an employee needs time off work to look after someone?


Employees may need time off to deal with an emergency caused by the coronavirus ― for example, if they have children they need to look after or arrange childcare for because their school has closed; or to help their child or another dependant if they're sick, or need to go into isolation or hospital


Employees are entitled under the current legislation to time off work to help someone who depends on them (a “dependant”) in an unexpected event or emergency. This would apply to situations to do with coronavirus.

There's no statutory right to pay for this time off, but some employers might offer pay depending on the contract or workplace policy. Furthermore, the amount of time off an employee takes to look after someone must be “reasonable” for the situation ― for example, they might take two days off to start with and, if more time is needed, they can book holiday. What counts as “reasonable” depends on the circumstances, but coronavirus is a very new challenge.


What is the position on pay for several my workers who have had to self-isolate because of the coronavirus?


In response to the actual and potential problems caused by the coronavirus, the Government has taken a number of emergency measures in respect of SSP, particularly for those who are forced to stay away from work — known as “self-isolating”. The Government estimates that 20% of the working population could be off at any one time.

The immediate response was:

On 4 March 2020 the Prime Minister announced that employees will receive SSP from Day One, rather than Day Four under the present system. Further details of this are still to be released.

The Health Secretary stated that employees and workers who self-isolate for health reasons will count as being off sick from Day One.

On 11 March 2020 as part of the Budget, the Chancellor announced a further series of extraordinary measures to help businesses and individuals affected by the virus. They include:

SSP will be available to all eligible (those above the lower earnings limit) workers and employees if they must self-isolate because of the virus, even if they do not display symptoms of coronavirus. This change is to encourage self-isolation and to minimise the risks to public health from the virus

SSP will be temporarily extended to cover those caring for people within the same household who display COVID-19 symptoms and have been told to self-isolate.

The cost of providing SSP to any worker or employee off work because of the virus for up to 14 days for businesses with fewer than 250 employees will be met in full by the Government — estimated to be over £2 million.

To ease the pressure on GPs, coronavirus sick notes will be given out over the phone by the NHS 111 Helpline. These will be valid as evidence of sickness absence. Employers have been asked to exercise their discretion not to demand a GP fit note

As already indicated, to be eligible for this SSP the employee or worker must earn above the lower earnings limit which is £120 per week for 2020/21. This will exclude low paid workers and many on zero-hours contracts. The self-employed are not eligible.

The Government is considering other measures, including the extended use of Universal Credit and Contributory Employment and Support Allowance for this significant proportion of the working population.


It is important for employers to remember that they are not responsible in these circumstances for any self-employed person, including contractors. Freelancers may be entitled to some benefits from the state.

Overall, employers should remember their duty of care to their staff — particularly to protect their health and safety. Employers can remind staff what is expected of them and keep them up to date with developments but should be mindful about taking any disciplinary action against workers in this present situation under their absence management policies.


The Government has announced the closure of schools and nurseries due to the coronavirus (COVID-19). Some of my staff will now want to be at home to look after their children. What leave entitlements are there?


Schools across England, Scotland, Wales and Northern Ireland are to close on 20 March because of the coronavirus pandemic. The measures apply to state and private schools alike, nurseries and to sixth-form colleges.

After 20 March, many working parents will have little choice but to take time off work to look after their children at home. The Government advice is to not ask grandparents to help with this childcare, because of their potential vulnerability to the virus.

The Education Secretary says the schools and nurseries will be closed "until further notice".

This will cause obvious childcare problems for employers and for significant numbers of working parents. There are three types of leave that may help staff in this difficult situation.

Time off for dependants

This right to emergency leave applies to all employees. They are entitled to a “reasonable” amount of unpaid time off to deal with a family emergency, including the care of a dependant. The closure of schools because of the coronavirus should easily fall within this definition. The legislation does not state how long this leave should last but it is usually two days. The leave is unpaid.

This is clearly not enough leave for working parents to look after children for an unknown period as no date has been given as to when the schools and nurseries will re-open.

Parental leave

Entitlements under statutory parental leave are not to be confused with shared parental leave, which is taken after the birth of a baby or a child has been adopted.

Eligible employees have the right to take parental leave for the purpose of caring for a child for whom they are responsible. Again, the closure of schools and nurseries because of the coronavirus and the children being at home would fall within this definition.

To be eligible for parental leave under the legislation the employee must have a child under 18 years of age and have had one year’s continuous service with the employer. The leave is unpaid and can last for up to 18 weeks per child.

Employers may have an existing parental leave policy, which sets out these rules. In the light of the present crisis they may consider waiving the service eligibility and extending the leave entitlement to a wider group of staff. If an employer chooses to do this, then it should ensure that staff know that this is a temporary measure taken in extraordinary circumstances and that the usual rules about parental leave will resume after the end of the virus emergency.

There is a default parental leave scheme but, as this requires the employee to serve notice of their intention to take such leave at least 21 days before that leave starts, it is impractical in the circumstances since the Government announced on 18 March 2020 that schools and nurseries would close in two days’ time — on 20 March.

Annual leave

An employer could allow employees to take annual leave to cover the situation. Workers and employees are entitled to paid statutory annual leave from the time that they start work with the employer. The annual UK entitlement under the Working Time Regulations 1998 is for 5.8 weeks, capped at 28 days. Part-time staff will have a pro rata entitlement.

During the time of the leave the worker and employee with “normal” working hours receive their normal pay. The calculation is more complicated if the working hours are variable and some employers may have added and enhanced contractual annual leave.


The position is obviously worrying for both staff (especially as much of the relevant leave is unpaid) and for employers who will be concerned about the continued viability of the business. How long the coronavirus emergency will last is unknown and no date has been given as to when the schools and nurseries will reopen.

In such circumstances working at home, if practicable, may be a viable alternative. See the Croner-I Temporary Homeworking Policy, setting out the appropriate arrangements and safeguards for remote working.

Some members of staff may attempt to get around all of this by calling in sick and stating that they are self-isolating because of the virus. This may be true in some cases, but staff should have already been made aware by the employer that trust is an important ingredient in working life during this emergency and that any intentional abuse of the system will lead to disciplinary action.

Overall, employers and their staff must find the most effective way to keep going during the coronavirus emergency. Flexibility is required on all sides. Employers do have considerable discretion in this crisis to adapt policies and entitlements to provide suitable temporary arrangements for leave and childcare for working parents.

Job Retention Scheme 

The Government has announced its plans for financial assistance to help employers retain employees for an extended period of time, although offering no work, and avoid lay-offs. It is called the Job Retention Scheme and, while little information has been published as to how it will work, we have set out below what we do know, which will be updated as more details are released.


What is the Job Retention Scheme?

It involves employers placing their employees on “furlough”. This is a term which is typically used in the US and essentially means putting employees on temporary leave of absence where they do not work and do not receive pay, but are retained on your books to be brought back in when you need them. Employers who do this will be able to obtain a grant from the Government to cover 80% of “furloughed employees” wages, to a maximum of £2500 per employee per month.

Which employers can access the scheme?

All employers can access it; there is no restriction on size or type.

How do I get the Government grant?

Guidance states that you will need to designate which of your workforce will be furloughed employees and then submit that information to HMRC, along with each employee’s earnings. You will then receive a grant to cover the 80% wages. More information is awaited from the Government on the online portal to be used to submit the information and what other information may be needed. The Chancellor has stated he hopes the first grants will be paid by the end of April 2020, and they will be backdated to 1 March 2020. The scheme is initially intended to run for three months but may be extended.

Which employees can be furloughed?

Theoretically any employee can be furloughed. They need to be on PAYE in order for you to be able to claim the grant for their wages. Guidance states that your ability to furlough an employee depends on their contract. It is not likely that employee contracts will include a specific right to use furlough. However, contracts which contain a right to lay off employees on no pay already give you the right to send employees home and not pay them for a temporary period and so can likely be used to furlough employees. The difference is that employees on lay off will receive, subject to service criteria, statutory guarantee pay (SGP) whereas furloughed employees will receive 80% of their wages. SGP is £29 per day for a maximum of five days in a rolling 13-week period, so furlough offers the employee a much more favourable option in terms of pay. Despite a lay off clause, you may wish to seek specific agreement to the period of furlough with employees at the time to avoid challenges in the future that the employee was not in full agreement to being placed on leave with reduced pay. If contracts do not contain a right to unpaid lay off, you can ask the employee to agree to furlough. Although 80% of wages may not be an initially attractive option next to full pay, it is likely to be more attractive than redundancy which may be the end result if alternative options cannot be found. It may also be useful for employees who are struggling to find childcare.

If you have already taken the step to utilise lay off, you can get in touch with those employees and agree to change their current status from lay off to furlough. This would simply involve changing their pay arrangements from nothing (if not entitled to SGP), or SGP to 80% wages, as they are already not working.

You need to designate employees as furloughed, which means it is your choice. However, if you are not placing everyone on furlough, you should consider carefully who it should be. Think about whose skills will continue to be in demand through this difficult period. While you may assume that the best thing to do is furlough those employees labelled as high risk by the Government, forcing them on to furlough without their input, and therefore forcing them on to 80% wages, may result in discrimination claims from those who allege they were made to do it because of their age, disability or pregnancy. Where you need to select employees for furlough, it may be best to ask for volunteers across the workforce and if any high risk employees, who had previously been risk assessed as fine to still be in work, put themselves forward, it may well be appropriate to choose them first. There does not appear to be a maximum or minimum number of employees who can be furloughed.

Can I furlough employees now?

In the absence of full guidance from the Government on how the Job Retention Scheme will work, it may be prudent to wait before taking action to place employees on furlough now. However, it should be acknowledged that employees are in a difficult position with regard to the security of their jobs and may welcome some communication about what is happening. For this reason, we have created a template letter to explain an organisation’s plans to use furlough when more details are available.

Can I furlough employees who are on short-time working?

Furlough requires the employee to not carry out any work, so short-time working could not continue during furlough. However, consider whether you could re-organise reduced work patterns to allow for some of those on short-time working to go back to full hours and the others to be furloughed. You should discuss this with employees first.

If I put employees on furlough and I get a grant to cover 80% of their wages, do I have to make up the other 20%?

No, there is no requirement to do this, but you can if you wish.

What about zero hours employees who have no standard wages? How will the 80% be calculated?

There is no clarity on this yet but the Chancellor said the intention was to try to cover as broad a group of people as possible.

Important Telephone Numbers

HMRC Business Support Line 0800 024 1222

HMRC tax helpline for businesses struggling to pay taxes as they fall due 0800 0159 559











Reviewed as at 24th March 2020

Print Print | Sitemap Recommend this page Recommend this page
© Ashworth Bailey Limited