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Lay-offs, short-time working and Statutory guarantee payments

Article ID


Article Name

Lay-offs, short-time working and Statutory guarantee payments

Created Date

20th March 2020


IRIS PAYE-Master, Earnie, IRIS Payroll Business, IRIS Earnie IQ, IRIS Bureau Payroll, IRIS GP Payroll


Lay-offs, short-time working & Statutory guarantee payments


This information is provided by and is the standard information for employers. Legislation may be ammended as a result of Covid-19. We will update if/when more information becomes available or the situation changes.

Lay-offs and short-time working

You can lay off an employee (ask them to stay at home or take unpaid leave) when you temporarily cannot give them paid work – as long as the employment contract allows this.

Short-time working is when an employee works reduced hours or is paid less than half a week’s pay.

Laying off staff or short-time working can help avoid redundancies – but you have to agree this with staff first.

This could be in:

  • their employment contract
  • a national agreement for the industry
  • a collective agreement between you and a recognised trade union
National and collective agreements can only be enforced if they’re in the employee’s employment contract.

You may also be able to lay off an employee or put them on short-time working:

  • where you have clear evidence showing it’s been widely accepted in your organisation over a long period of time
  • if you agree with the employee to change their employment contract to allow them to be laid off or put on short-time working (this will not automatically give you the power to do this without their consent in the future)

Statutory guarantee payments

Employees are entitled to these if you do not provide them with a full day’s work during the time they’d normally be required to work.

The maximum payment is £29 a day for 5 days in any 3 months (ie £145). If employees usually earn less than £29 a day, they’ll get their usual daily rate. For part-time workers, the rate is worked out proportionally.

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