Coronavirus COVID-19: FAQ’s – Downturn in work

I do not have enough work for my employees due to the impact of coronavirus, what are the options available to me?

There are several options available to you depending on your circumstances.

If the downturn in work is likely to be for a short period of time, you could ask employees to take unpaid leave, with their consent or you could ask them to use annual leave. Unless your contract states otherwise, you can tell employees when to take annual leave, but must provide twice the amount of notice as the length of the annual leave.

If you have a lay-off or short-time working clause in your contract you could implement that. Lay-off refers to not providing work for a period of time and short-time working refers to a reduction in hours. If you do not have a clause in your contract you could seek employee consent to this but will need to ensure you properly consult. Be mindful that if your employee is likely to be laid off for four continuous weeks, or six weeks within a 13-week period, they may be entitled to statutory redundancy pay.

The government have announced a coronavirus job retention scheme, whereby if you do not have work for your employees, you could seek their consent to be changed to furloughed status. The employee could be paid up to 80% of their salary capped at £2,500. You would continue to pay them through payroll and claim the money back from HMRC using a repayment system which is in the process of being set up. The details on this scheme are still quite woolly at the moment and we are waiting for further guidance from the government.

Finally, if you have no alternative option then you may consider redundancies. The usual redundancy provisions will apply such as avoiding compulsory redundancies and consulting.