What is lay off and short time working?
The current global crisis surrounding COVID 19 is likely to have a damaging economic impact and this is a concerning time for businesses and employees alike. Many businesses may experience a downturn in work which may, unfortunately, potentially lead to redundancy situations. Lay off and short time working are temporary measures, usually used to try and avoid or reduce the need to make redundancies.
“Laying off” of employees broadly means that an employer provides an employee with no work (and no pay) for a period of time while retaining them as employees.
“Short time working” broadly means providing employees with less work (and less pay) for a period of time while retaining them as employees.

When may lay off / short time working be considered?
Laying off of employees may be considered if, for example:
There is a downturn of work due to the effect of COVID 19 which means that there is fewer employees required on a temporary basis; or
There is a temporary closure of the workplace due to insufficient employees being able to work.
Short time working may be considered if, for example, there is a downturn in work due to COVID 19 and the business does not need all employees to work their contracted hours.

When can I lay off employees / introduce short time working?
Generally, in order to lay off employees or introduce short time working, an employer must have a contractual right to do so. This means that there must be an express term in the employees’ contract of employment which allows for an employer to introduce lay off of short time working.

In the absence of an express term, there are some instances where lay off or short time working may be implied through custom and practice. However, employers would need to be confident that they could satisfy the strict legal test before relying on an implied right to lay off / introduce short time working.

If employees are laid off or put on short time working when there is no contractual or implied right to do so, the employer could face legal claims such as breach of contract, constructive unfair dismissal and/or unlawful deduction form wages. It is therefore essential that legal advice is sought before taking such action.

How would the guaranteed period be affected under the TICI National Agreement?
Under clause 2 of the TICI National Agreement, operatives who have been continuously employed by an employer for 4 weeks are guaranteed 38 hours of work per week (the guaranteed period). In circumstances where there is not enough work available for the whole or part of a guaranteed period, the operatives covered are usually assured earnings for 38 hours at the appropriate basic rate.

However, where approved short time working is introduced as an alternative to redundancy, the period of guarantee shall be reduced accordingly. Where approved layoff occurs as an alternative to redundancy, the period of guarantee shall not apply during the period of lay off. This suggests that it should be possible to consult and agree with employee representatives via the trade unions that these exceptional circumstances require such approval to trigger these provisions to be agreed. This should be done as a matter of urgency.

In any event clause 2.10 of TICI provides that where work is not available for reasons “which are beyond the employer’s control” the guarantee shall be suspended provided that 14 clear days’ notice is given to the employees.

Statutory Guarantee Payments
An employee may be entitled to a statutory guarantee payment (SGP) on up to 5 “workless days” in a three-month period. Once this has been exhausted, employees may be able to claim Job Seekers Allowance. Further information on the statutory scheme can be found on the government website.

Redundancy Payments
If an employer exercises an express or implied right to lay off an employee or to put them on short-time working, in certain circumstances, the employee becomes entitled to claim a statutory redundancy payment.