Laid Off
Last week I told one of our employees that we were going to have to lay him off due to lack of work. It was only going to be for a couple of weeks. He has instructed a solicitor who has written us a strong letter claiming breach of contract, redundancy pay and unfair dismissal. Surely he cannot do this as despite being with us for five years, he does not have a contract and we should be able to find him some work next week albeit slightly different to that which he normally does?
To lay employees off without dismissing them, you need the contractual right to do so. This is obviously best done by having something in writing to that effect in the contract or a handbook policy. Failing that you may get away with a custom & practice of doing so. Even if you have this authority it is not something which you can do for long. There is legislation which says that once an employee has been laid off or put in short-time working for at least four consecutive or six weeks in a 13 week period they are entitled to claim redundancy pay. As you have not issued him with a contract you will have great difficulty establishing your right to lay off. You will have even more difficulty convincing the Tribunal that you are a good employer given your failure to provide a contract which you should have provided within 8 weeks of him starting work for you. As you have not followed any sort of procedure then there is a good chance that a Tribunal would decide that you have unfairly dismissed him because they choose to believe he was made redundant (badly).
What can you do?
You should immediately write to confirm:
• it was only a lay off, not a dismissal
• you are expecting him to return to work next week.
It would also be wise to offer to pay him for the intervening period. This may seem expensive but is nothing like as costly as fighting and losing a Tribunal. You should also commit to providing him (and any other employees) with a well drafted contract or what is strictly speaking a written statement of employment particulars.
A well drafted statement will also have a flexibility clause which allows you to move people within the organisation. At this stage it would probably not be a good idea to point out the ‘slight difference’ in duties as the important thing is to get him back to work without putting up additional hurdles to doing this.
If you do not want him back you need expert advice to demonstrate that the situation could not be avoided and that the procedural/contractual failings would have made no difference to the end result and therefore he has not lost very much. This is a very difficult area and needs to be done well to avoid making the situation worse.
To recap
1. You must have a contract with employees that states you can lay them off without dismissing them.
2. If you have a contract that allows you to do this, you cannot do it for long. Once an employee has been laid off or put on short time working for at least four consecutive weeks or six weeks in a 13 week period they are entitled to claim redundancy.
3. If you do not have a contract with the employee it will be difficult to establish a right to lay employees off.
4. No contract means it would be hard to persuade any Tribunal you are a good employer as by law contracts should be provided within 8 weeks of starting work with you.
The guidance provided in this article is just that – guidance. It is not legal advice as every case depends upon the facts. The law is forever changing and you need to keep up with these changes to ensure that you are behaving in the correct way.
Before you take any action make sure that you know what you are doing, or call us for specific advice.
