Working reduced hours as an alternative to redundancy

If there’s not enough work for you, your employer might ask you not to come into work, or to take unpaid leave.

A lay-off is when you’re off work for a minimum of one working day.

It’s important not to make any snap decisions. If you have one, it’s a good idea to discuss your options with your union or employee representative. Put time aside to talk it over with your family – as it’ll affect them too.

Can your employer reduce your hours, or lay you off? The short answer is – only if your employment contract allows it.

If not, your employer will have to negotiate a change to your contract.

Typically, this will involve many members of staff. They, or their union, will have to agree to the new arrangement.

You should also check if your contract allows you to take on another paid job while you’re on reduced hours.

Statutory guarantee pay is the legal minimum your employer must pay if you’re laid off.

It’s paid for a maximum of five days in any three-month period, and is capped at £30 a day – so a maximum of £150.

However, you might get more than this if it’s written into your employment contract.

You might be able to claim Universal Credit if you’re on short-time working or have been laid off.

If you need help with things such as housing costs or bringing up children, you can make a claim for Universal Credit.  

If you are receiving tax credits you must contact the Tax Credits Helpline on 0345 300 3900 if your income or working hours have been affected.

If this is a temporary drop for up to four weeks, it shouldn’t affect your tax credits.

Top of your list is probably going to be money. How is your household income going to be affected by reduced hours?

If there are other jobs available where you live, you might be tempted to leave – even for slightly less money.

But be aware that leaving voluntarily could mean missing out on valuable redundancy rights.

Depending on what your contract says, there’s no limit to how long you can be laid off or put on short-time working for.

But if you’ve been in this position for four weeks in a row (or six non-consecutive weeks in a 13-week period), you should be able to claim redundancy pay if you decide you’ve had enough.

The Coronavirus Job Retention Scheme, or furlough scheme, allowed employees who couldn’t work due to the pandemic to continue receiving up to 80% of their salary. The furlough scheme ended in September 2021.

Your employer might want to change the terms in your contract, such as a cut in pay or change to part-time working, but they can’t without your consent.

Before agreeing to a change, find out from your employer how it would affect any pay-related benefits and rights you’re entitled to, such as

• sick pay
• future redundancy pay, and
• employer’s pension contributions
  

Your employer can’t just bring in a change to your contract if you don’t agree.

However, if they make changes and you don’t do or say anything, this might be seen as you accepting the changes.

It’s important to know your rights so speak to your trade union rep, if you have one. Or contact one of these workplace advice services:

• Call the Acas Helpline on 0300 123 1100 or visit the Acas website (England, Wales and Scotland).
• Call the Labour Relations Agency Helpline on 028 9032 1442 or visit the Labour Relations Agency website (Northern Ireland).