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Lay-off and short-time working

Overview

Lay off and short-time working, otherwise known as ‘LOST’, are often considered as the same issue. For organisations and employees, however, these are two distinct concepts which have specific legal definitions set out within the Employment Rights Act 1996.

LOST is usually considered as an alternative to avoid compulsory redundancies, usually when there is a downturn in work or finance necessary to fund full-time employment. More information on redundancies, and considering alternatives, can be found in our employment law resources.

Employees may be placed on unpaid LOST where there is a contractual term entitling employers to do so. In the absence of such as contractual clause, unpaid LOST will breach the employees’ contracts of employment, entitling them to resign and claim constructive unfair dismissal.

Those who are placed on LOST may be entitled to receive statutory guarantee pay, or SGP. Further information on this entitlement is available in our guarantee pay resources.