Category Archives: lay off

The Legalities of Lay Offs

When times are tough many employers often have to consider laying off staff.  In the construction industry there is a history of doing so.  However due care and attention needs to be paid to the process in order to avoid costly employment tribunal compensation for getting it wrong.

In order to lay staff off there needs to be an express contractual right to do so.  Employers can not just lay staff off because work has diminished.  The contractual clause should state whether the right to lay offs allows the employer to do so with a reduced salary or no salary at all. Without such a clause employees can make a claim of breach of contract, constructive dismissal and/or unlawful deduction of wages. It might be possible for an employer to claim an implied right if such a practice has continued for a long time and therefore become custom and practice.

With a temporary lay off a contract can be varied with the mutual agreement of both parties.  This should be confirmed in writing.  However such an agreement does not allow the employer to unilaterally lay the employee off in future.

They may be entitled to a guarantee payment of up to five days in three months; this is currently £24.20 per day.  On days when there is no payment Jobseekers Allowance or Income Support can be claimed. Employees who are laid off for four continuous weeks or more or for six weeks in any thirteen week period can take redundancy.