LOST: Lay off and short time working

Here at Agility Risk & Compliance we are right beside you in these uncertain times during COVID-19. Please call our HR team on 01527 571617 and they can talk to you directly. In the meantime, there are many questions around LOST. We have put the below helpful information together to ensure your business is protected.

 

Lay-Off And Short Time Working (LOST) – Updated 20 March 2020

With the current uncertainty around COVID-19, it is important for businesses to have plans in place to ensure their business is protected. LOST may be an option for businesses to reduce the risk of redundancy.

 

Short Time Working:

Short time working is an option for employers if they do not have enough work to give their employees. This is usually a short-term option to reduce the risk of redundancy. Short time working means an employer can reduce an employee’s working hours/days and pay.

If an employer is considering short time working, it must be in their employees’ contract of employment to allow them to do so. If there is no mention of short time working in their contracts, then the employer cannot go ahead with it.

If their contract of employment mentions short time working, then the employer is legally allowed to cut down hours and pay.

Short-term Layoff’s:

If an employer does not have enough work to offer short time working, they may be able to offer short term layoffs. Short term layoffs mean that the employee will be off work for a short period of time. Like short time working, for an employer to consider short term layoff it must be in their contact of employment.

 

Pay:

If an employer puts an employee on short time working or short-term layoff, they may be entitled to ‘contractual guarantee pay’ or ‘statutory guarantee pay’. The employee will need to have worked there for at least 1 month and be earning less than half of their normal pay. Employees must be aware that they can only receive 5 days of statutory guarantee pay in a 3month period.

 

Redundancy:

If an employee has been on short time working or short-term layoff for a period of 4 weeks or 6 weeks in a 13-week period, they will be able to apply for redundancy and claim redundancy pay.

 

What If My Employment Contracts Don’t Have A LOST Clause?

Don’t panic. Is there a LOST clause in your staff handbooks? Do your employment contracts have wording along the lines of:

“This agreement incorporates the terms, conditions and provisions provided to you in your offer of employment as well as the Staff Handbook….”

If so, this will mitigate any risk to yourselves should you exercise your policies in your handbook, including that of LOST.

 

What If My Employment Contracts Nor My Handbooks Contain A LOST Clause?

In this scenario, we would suggest you look into your Contracts to see if there’s a Variation clause.

If so, you could consult with your employees to seek their agreement to vary the contracts in order to include a LOST. You can appeal to their better nature. If not, we would recommend caution if wanting to proceed with LOST.

Either way there is a risk associated. You could find yourself answerable to Constructive Dismissal Claims or Breach of Contract Claims.

If you would like more information about how or HR team can help support your business

Contact us today on 01527 571617.

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