As a result of the current economic downturn, one of the questions I am often asked by employers in the construction industry is whether, with business dropping off, staff can be given a temporary lay-off from work and if so how can this be achieved?
In the construction industry there is a history of making temporary lay-offs and there is some logic to the argument that you can only give employees work when the business has work coming in. Traditionally, it seems employers and employees working in the construction industry have accepted this.
However, employees have been given greater protection and an employer who does not take this into consideration before making a decision that affects his staff, will risk being taken to an Employment Tribunal.
Employers do not have a right to lay-off staff simply because work has diminished. There must be a contractual right to lay-off staff and it must be clear that this right also allows an employer to lay staff off and pay a greatly reduced salary or no salary at all.
An implied contractual right could arise through custom but if an employer relies on this, the employee will always have an argument that the right did not exist and you could still find yourself in an Employment Tribunal. If you lay staff off without a right to do so this is a breach of contract and you risk receiving a claim of constructive dismissal or unlawful deduction from wages.
Ideally, the right will be expressly stated in the employee’s contract but if the contract has no right to lay-off the employee included within it, then you are far safer getting agreement from the employee.
The reality is likely to be that you will have the option of either laying-off staff or making redundancies and this should be explained to staff. Given these options your employees may well agree to a temporary lay-off. Employees who are laid-off can take redundancy if the lay-off last for 4 continuous weeks or more or if they are laid off for 6 weeks in any 13 week period.
Having spoken to many employers who have been in this situation, it is clear that there had been a general assumption that these kind of decisions could be made without having to consult their employees. Although some cases like this may have been resolved amicably, the problems were avoidable by inserting a few simple provisions in the employment contracts. That way, businesses could have ensured much greater flexibility when difficult decisions needed to be made.
At Nelsons we give half an hour’s initial advice to FMB members and half an hour to members of the Nottingham Construction Forum on any employment matter.
For further information please contact Dan Fellows on 0115 989 5238 dan.fellows@nelsonslaw.co.uk
