Redundancy and change

Lay-off or short-time working notice letter

Tells employees that there is temporarily no work, or reduced work, and what they will be paid, under a contractual lay-off clause.

A gap between contracts, a site shut by weather or a client, materials that have not arrived. Lay-off (no work, no pay beyond guarantee pay) or short-time (reduced hours and pay) is only lawful if the contract allows it or the employee agrees. Without that, it is a breach of contract and an unlawful deduction.

Before it goes

  • The written statement contains a lay-off or short-time working clause, or you have the employee's written agreement.
  • You have counted: after four consecutive weeks, or six in thirteen, employees can claim statutory redundancy pay.
  • You know the statutory guarantee pay rules (up to five days in any three months, at the statutory daily rate or the day's pay if lower).

The letter

[COMPANY NAME] [COMPANY ADDRESS] [DATE] [EMPLOYEE NAME] [EMPLOYEE ADDRESS] Dear [EMPLOYEE FIRST NAME], Temporary lay-off / short-time working from [DATE] I am writing to confirm what I told the team today. Because [REASON, e.g. the [SITE] project has been suspended by the client pending a planning decision / the [CONTRACT] does not start until [DATE] and the intervening work has not materialised], there is temporarily [no work / reduced work] available for your role. Under clause [NUMBER] of your written statement of terms and conditions, the company may [lay you off without pay / place you on short-time working] where there is a temporary shortage of work. I am invoking that clause with effect from [START DATE]. [Lay-off: You will not be required to attend work from [START DATE] until further notice, and you will not be paid your normal wages for that period. You will be paid statutory guarantee pay for up to five workless days in any period of three months, at the statutory daily rate or your normal day's pay if that is lower. / Short-time working: from [START DATE] your hours will be reduced to [HOURS] per week, working [DAYS AND TIMES], and you will be paid for the hours worked. For any day on which no work is provided, statutory guarantee pay applies as above.] Your employment continues throughout. Your continuous service is unaffected, you continue to accrue holiday, and you remain bound by your terms including notice. [You may take holiday during the lay-off if you wish, and will be paid holiday pay for it.] You may take other work during the lay-off provided it does not conflict with your duties to the company; please let me know if you do. We expect the position to last approximately [PERIOD] and we currently expect normal working to resume on or around [DATE]. I will update you every [week / fortnight] by [phone / email], and give you at least [NUMBER] days' notice of your return. You should be aware that if lay-off or short-time working continues for four consecutive weeks, or for six weeks in any thirteen, you have the right to give written notice claiming a statutory redundancy payment, subject to the rules in the Employment Rights Act 1996. I hope that will not be necessary. If you have any questions about your position, or about benefits you may be able to claim while laid off, please ask me or contact Jobcentre Plus. I am sorry to have to write this letter and will do everything I can to get the team back to work as soon as possible. Yours sincerely, [MANAGER NAME] [JOB TITLE] [COMPANY NAME]

Filling it in

Clause number
Quote it. If there is no clause, this letter cannot go out as written: you need agreement, or you are looking at redundancy or paid time off.
Duration
Give your honest estimate and a date for the next update. People can cope with bad news; they cannot cope with silence.

What the law says

  • Contract: lay-off and short-time working without pay require an express contractual right or agreement.
  • Employment Rights Act 1996 ss.28 to 35: statutory guarantee pay for workless days, up to five days in any period of three months, for employees with one month's service.
  • Employment Rights Act 1996 ss.147 to 154: an employee laid off or on short time for four consecutive weeks, or six weeks in thirteen, may serve written notice claiming a statutory redundancy payment; the employer can serve counter-notice if normal work for at least 13 weeks is reasonably expected to resume within four weeks.
Guidance, not legal advice. Employment law moves; check the current position before relying on any of it, and take advice on anything that could end someone's employment.

What turns this letter into a claim

  • Do not lay off without a contractual right. It is an unlawful deduction from wages for every day, and a repudiatory breach of contract.
  • Do not let it run past four weeks without a plan. The redundancy right kicks in, and you may prefer to control that process than react to a notice.

Questions people ask

What is statutory guarantee pay?

A small daily payment for days on which an employee with a month's service would normally work but is given no work, for up to five days in any three months. The daily rate is set by the government and changes each April; if the employee's normal day's pay is lower, you pay that. It is a floor, not full pay.

Can employees claim benefits while laid off?

They may be able to claim Universal Credit or new-style Jobseeker's Allowance depending on circumstances. Point them at Jobcentre Plus; do not try to advise them yourself.

Can I lay off some people and not others?

Yes, if the selection is for a genuine operational reason and not discriminatory. Explain the basis (for example, by site or trade) in the letter.

The letter, with the names already in

Employ AI drafts letters like this one from the employee's record, so the dates, service and pay are already right, and the disciplinary module writes the invitation and outcome letters from the case itself. All 44 letter families, 49 UK policies, GPS clock-in, rotas, leave and timesheets: £2.50 a month plus £1 per employee. 14 days free, no card.

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