Redundancy pay linked to lay-off and short time working 


An employee who is laid off without pay or put on short-time working (earning less than half their weekly wage) may be able to claim a redundancy payment. The rules — summarised below — are complicated and the timetable is strict, so anyone considering applying should ask for advice from their union or a Citizens Advice Bureau.


The rules are found in sections 148 -154, ERA 96. Employees with at least two years’ service can claim statutory redundancy pay after being temporarily laid off (without pay or on less than half a week’s pay) for either:


• more than four weeks in a row; or


• more than six non-consecutive weeks in a thirteen-week period.


To claim a redundancy payment when temporarily laid off, the employee must follow this strict procedure:


• first, the employee must write to their employer to tell them they intend to claim statutory redundancy pay. This must be done within four weeks of the last non-working day in the four or six week period;


• the employer then has seven days in which to either accept the claim or send a written counter-notice objecting that no redundancy is payable;


• an employer should only send a counter-notice if they expect the normal working week to resume within 4 weeks and to last at least 13 weeks;


• The employer can withdraw their counter-notice in writing;


• if the employer does not send a counter-notice, the employee can assume that the employer accepts that they are redundant. The employee must resign by giving contractual notice in order to claim redundancy pay. The timing of the resignation is crucial. There are just three weeks in which to resign, counting from either:


◊ seven days after giving written notice to the employer, assuming no counter-notice is sent by the employer; or 


◊ if the employer withdraws their counter-notice, the date on which this happens. 


Only by strictly following the procedure set out above will an employee who has been laid off be able to claim a redundancy payment (Craig v Bob Lindfield & Son Limited [2015] UKEAT/0220/15/LA). 


It would be a breach of contract for an employer to lay-off employees or put them on short-time working if there is no genuine downturn in work, or to serve a statutory counter-notice when there is no genuine expectation of a reasonable period of full-time working (Craig v Bob Lindfield & Son Limited [2015] UKEAT/0220/15/LA).


The redundancy pay of an employee made redundant while on statutory short-time working must be calculated using their normal weekly wage before they moved on to short-time working, not the short-time weekly wage (section 226(5)(6), ERA 96, Dutton v Jones t/a Llandow Metals UKEAT/0236/12/ZT). An employee’s consent to short-time working is not consent to waive any of their other rights under the contract of employment.