Lay offs 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 very complicated and the timetable is very 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 of 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:

• as a first step, 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;

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

• if the employer does not send a counter-notice, they can be assumed to have accepted the claim that the employee is redundant;

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

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

• the employee must resign 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; or

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

The redundancy pay of an employee made redundant while on statutory short-time working must be calculated using the employee’s 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.