Lay-off and short-time working contract clause


Can anyone help by sharing/ providing the wording of Layoff and Short Term Working Clause that they have within their contract of employment.

We need to add this to our current contract but we need some guidance on what is the best wording given current circumstances.  We are a tiny company (5 employees) so do not have access to HR Inform, so any help from by CIPD buddies would be very welcome.

Many thanks in advance.


  • 16. Lay-Offs

    The Company reserves the right to lay you off or put you on short-time working where the needs of the Company’s business make it necessary. You will be paid statutory guarantee payments during a period of any lay-off or short-time working.

    Hope that helps - though more learned colleagues may be able to improve or add to it!
  • Sound advice from Sam.
    Remember also that if the layout is prologed, staff can claim that they are redundant.
    This means 4 successive weeks or 6 weeks in a 13 week period.
  • We have the following words - (Company name) reserves the right to introduce short-time working or a period of temporary lay off without pay where this is necessary to avoid redundancies or where there is a shortage of work. The company will comply with any statutory guaranteed minimum payment obligations.
  • In reply to Meena:

    Many thanks Meena, much appreciated.
  • In reply to Sam:

    Many thanks Sam. Much appreciated.
  • In reply to Clayre Patricia:

    I slightly prefer Meenas clause as it highlights the no pay save for statutory amounts
  • In reply to Keith:

    Some clauses specify a maximum number of days of layoff. If no maximum is specified, it will be implied that the lay-off should be only for a reasonable period. Where there is an express right to lay off an employee without pay, as has been said, the employee may be entitled to a guarantee payment. As also said, laying off an employee may also give rise to an entitlement to a statutory redundancy payment
  • In reply to Ray:

    You may also wish to include wording on the employer's contractual ability to reduce hours of work in this clause. Technically this would need to be more hours of work than short time working which is less than 50% of normal hours but less than 100% of normal hours. This avoids a potential redundancy claim although there are also other ways that an employer can avoid redundancy by offering some work with the other two methods. Both lay off and short time working attract a possible redundancy application after 4 consecutive weeks or 6 non-consecutive weeks but as the employee needs to resign to receive this, there can be a large cost saving for the employer as the notice is the employee's, not the employer's.