Temporary Short-time working and implications for guarantee payments
If you are a business that has experienced a downturn in trading you may have chosen to lay off employees or put them on short-time working as an alternative to dismissal. In such cases employees on short-time working may be entitled to a guarantee payment (currently £24.20) for those days when they would normally work, but do not have work because their employer has imposed a temporary reduction in working hours.
The Court of Appeal has recently been asked to consider what “normally” required to work actually means. In the case they looked at [Abercrombie v AGA Rangemaster] the employees had entered into an agreement with the employer to reduce their working hours temporarily and to shorten their working week so that they did not work on Fridays. The agreement, which ran for several months, allowed the employer to call back the employees to their full working hours on one week’s notice.
The employees’ trade union, requested confirmation that the employees were entitled to guarantee payments for the Fridays they were no longer working. But the employer denied that the employees had a right to guarantee payments on the basis that, under the new agreement, they did not “normally” work on Fridays. The trade union disagreed and issued tribunal proceedings.
The case ultimately ended up at the Court of Appeal which distinguished this from previous cases where employers had permanently varied employees’ working hours under their contracts of employment. The difference in this case was that the variation to the employees’ contracts of employment was not permanent.
The court concluded that, due to its temporary and “abnormal” nature, the employees’ express agreement to alter their normal working days did not prevent them from the right to guarantee payments. The court held that Fridays remained days on which Abercrombie and his colleagues were “normally contractually required to work” and they were, therefore, entitled to guarantee payments for those days without work.
Employers that are considering reducing employees’ weekly hours temporarily should therefore be aware that they may, in fact, still be required to pay employees guarantee payments for any days they would normally have worked under their contracts of employment. Employees can currently claim up to a maximum of five guarantee payments in any three-month period.
Posted on 19 Nov 2016