An employer may only reduce an employee’s normal hours of work and reduce that employee’s pay accordingly if there is a specific term in the employee’s contract that allows for this. The same applies to laying an employee off without pay. Without such a provision, a unilateral reduction in hours or a lay-off would be unlawful. If there is such a contractual provision, which is not uncommon within the manufacturing sector, an employer may introduce a period of short-time working or lay-off staff without pay in circumstances where there is insufficient work available for them to perform. Short-time working and lay-offs are typically used to try to avoid having to make employees redundant, thereby protecting and preserving employment as well as protecting the employing organisation.
The following points need to be considered:
In the event that an employer does not have an explicit provision for short-time working or lay-offs enshrined in their contracts of employment, such a measure can be implemented with the agreement of the employee(s) affected. In exceptional circumstances, an employer may risk imposing the change unilaterally, but legal or other appropriate professional advice should be sought and taken before so doing.