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Is a contractual right to lay-off an employee conditional on being reasonable?

The employee’s employment contract allowed for lay off and short-term working for an indefinite period, without pay. After four weeks lay off without pay, he resigned and claimed that he had been constructively dismissed because the lay off had gone on for longer than a reasonable period. An employment tribunal held that there was no term to be implied as to reasonableness so far as the length of lay off was concerned, but that if there had been, the period was not unreasonable in all the circumstances of the case. As there was no repudiatory breach of contract, there was no constructive dismissal.

In some circumstances, employees can claim a statutory redundancy payment following a period of time on lay-off or short time working. To qualify, they must have been employed for at least two years and have been laid off or put on short time working for at least four or more consecutive weeks, or a total of six weeks (of which no more than three are consecutive) in any period of 13 weeks.

If you need advice regarding putting employees on short time working of laying them off CONTACT US.

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