The nationwide riots that erupted in August took everyone except, of course, those who planned them by surprise. They forced thousands of businesses across the country to shut and, due to the losses and damage sustained, many were unable to re-open for a significant period. Sadly, some remain closed or will be unlikely to trade again, mainly as a result of fire damage.
These unexpected events have thrown up many interesting employment law problems too many to deal with here. However, one of the most common is what happens to those staff who are unable to work because their workplace is closed at short notice? Must they be paid during this time, or does their employer have the right to automatically impose a lay-off? Initially, it all comes down to what is in their contract.
Are they paid?
Where an employer has no contractual right to lay off its employees or put them on short-time working where there is a lack of work due to problems with the business it cannot insist on this type of arrangement. This is regardless of its financial position or whether it is still able to operate.
In this situation the employer has to continue paying its staff in full. If they don’t, every affected employee will have a valid claim for an unlawful deduction from wages. That is why it is so important to have this type of clause in your contracts of employment.
Ensure your contracts only grant employees the statutory minimum pay during a period of lay-off in other words, £22.20 per day for the first five workless days in a three-month period. Note that this amount is reviewed annually. After this they may be entitled to claim Jobseekers’ Allowance.
It doesn’t end there
If you don’t have this type of contractual clause, it may still be possible to negotiate a lay-off with employees, although you cannot put one into operation without their prior written consent.
You are more likely to secure their agreement if you explain why you are seeking to lay off and the reasons why. If you are met with resistance, always explain the likely consequences for example, the risk of potential redundancies or the closure of the business. That should make them think twice.
If a member of staff won’t agree to a lay-off, don’t force the issue. Assuming they have one year’s service, they could resign and claim constructive dismissal. Instead, if you know that you will only be closed for the short-term, try to persuade them to take time off via any remaining paid annual leave.
If you are having any problems following the loss or destruction of personnel records, HMRC can help. For those affected by the riots, it has set up a dedicated helpline number: 0845 366 1207.