[Updated 18/01/25]

Placed on Short Time Working or Laid Off

Normally, short time working or being laid off is only lawful if there is a term to that effect in:

• your contract of employment or
• a national agreement which applies to your employment or
• a local agreement between your employer and a trade union.

An employee may be entitled to redundancy pay if he/she is laid off without pay or placed on short time working for less than half his/her normal hours.

Entitlement depends on whether:

i) his right to be paid under his contract depends on the employer providing him with work to do under that contract;

ii) the lay off or short-time working:

iv) the employee complies with the notice and counter notification procedure set out in the Employment Rights Act 1996.

Working for another Employer while on Short-Time or Laid Off

Unless there is a term in your contract which states you can not work for another individual/organisation while laid off or on short time working, you are normally permitted to work for someone else provided:

• you have obtained your employer’s agreement to do this;
• you will be available to return to your job when the short-time working or lay off finishes;
• you will not carry out work for a competitor to your employer.

Eligibility for Redundancy Pay if Laid Off or Placed on Short Time Working

If you will not be paid during the lay off or short time working, you may be eligible to claim redundancy pay but that is conditional on the following:

Short time working means that due to a reduction in the available work, you receive less than half of your week’s pay;

Laid off means that your right to be paid depends on your employer providing work of a type for which you are employed to earn that pay.

The conditions to claim redundancy pay in those circumstances are:

• The employee must notify his normal employer that he intends to claim redundancy pay because of the lay off or short time working within the required time periods.
• The length of the lay off or short time working is for a minimum period as stated in the Act – sections 148 to 152 of the Employment Rights Act 1996.
• Note that an employer may give a counter notice that he will contest any liability for the employer to pay the employee.

Regrettably to resolve such a situation it may be necessary for the employee to apply to an Employment Tribunal to clear the way to make a claim for redundancy pay.

The employee will also need to resign but it is wise to check that the employer will not be paying you for the weeks of missing short pay or weeks of no pay.

TIP – the aim of these statutory requirements sections is to prevent an employer from placing an employee on contractual terms that allow a lay off or short time working to continue for an indefinite period. This is relevant particularly to employees such as piece time workers.