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Short-time working to avoid redundancies

When demand is dipping, how can employers bridge the shortage of work without having to make redundancies?

No employer wants to lose staff with valuable skills, knowledge and experience often gained over many years at that place of work. One option is to ask employees to reduce their hours with the aim of spreading the shortfall between numbers so that no-one has to be let go. But is it as straightforward as it sounds?

This practice, known as 'short-time working', occurs when employees are laid off for a number of contractual days each week or for a number of hours during a working day. In many situations, normal practice would be for the workforce or their union to agree to short-time working as an alternative to redundancies.

But without an agreement, employers need to be very cautious. If an employer doesn't have an express right in contract or an implied right that has been established over a long period by custom and practice, they will not be able to reduce an employee's pay in line with any reduction in hours.

There's also a risk that if an employer takes this action unilaterally without the right to, it may well lead to claims of constructive or unfair dismissal at an employment tribunal. Employees could also sue for loss of wages in a civil court or make a claim for deduction of wages at a tribunal. Furthermore, employers who dismiss staff because they refused to take a reduction in hours may well have to pay them redundancy money. It's a complex area best approached with expert advice from a solicitor or a relevant trade union.

Certainly, if an employee is put on short-time working (that is, received less than half a week's pay) because of a shortage of work for four consecutive weeks - or for 6 out of 13 weeks - employees can give an employer written notice that they intend to claim a redundancy payment.

Acas has written the Advice leaflet - Lay-offs and short-time working which outlines the key issues and explains what employers and employees need to know. Further information about Lay-offs and short-time working can be found on the Acas website. Acas also provides practical training for managers, supervisors and employers on Managing change.

Visit the Acas Training and Business Solutions area for more information.

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