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COVID-19 What if I need to lay off my employees?

In some circumstances you may need to temporarily close your workplace and lay off employees.  This may be because you cannot offer your employees the opportunity to work from home, or you may have experienced a downturn in business. Whatever the reason, it is a difficult time for both you and your employees.

We know you won’t make this decision lightly. But before you make the decision, be sure to look at the business support available to you, especially as the government are making announcements of measures they are taking on a daily basis.

Lay-offs and short time working

As an employer you might need to close down your business for a short time, or even ask your employees to reduce their contracted hours.  If you decide you need to do this, it is vital that you communicate with your staff as early as possible in the process. And be sure to keep in contact throughout the closure.

Depending what is in your contracts, you may still need to pay your employees during this time.

Employees who are laid off and are not entitled to their usual pay might be entitled to a ‘statutory guarantee payment’ of up to £29 a day from you.

There is a limit of a maximum 5 days ‘statutory guarantee payment’ in any 3-month period.  On days when the guarantee payment is not payable, employees might be able to claim Jobseekers Allowance from Jobcentre Plus.

For more information about lay-offs and short-time working visit ACAS.

Using holiday

As the employer you have the right to tell employees and workers when to take their holiday. So if you have to close down for a period of time, you could ask your employees to take this time as annual leave and use up their holiday entitlement.

If you decide to go down this route, you must inform staff at least twice as many days before as the amount of days you need then to take. For example, if you need staff to take 5 days you will need to give them 10 days’ notice.

This could of course affect holidays they have already booked or planned, so you should:

  • Explain clearly why you need to close
  • Try and resolve anyone’s worries about how it may affect their future plans.

During these difficult times your employees may need to take time off to deal with an unexpected event or emergency and to make arrangements for their dependants.  A dependant does not necessarily have to live with the employee, it can be a neighbour or family member who relies on them for help.

Whilst there is no statutory right to be paid for this time, I’d suggest you would want to look at ways to help your employee.  The amount of time taken off must be reasonable for the situation.

If the dependant lives with the employee and get coronavirus symptoms, they should receive SSP and follow the self-isolation guidance.

School closures

As schools in England, Wales and Scotland closed as at 20 March 2020 you will need to consider this as an unexpected event, so that your employee can make new arrangements.  They can use:

  • Time off to care for children
  • Holiday, if you the employer agrees.

In all circumstances you and your employee need to consider these steps:

  • Talking to each other early on, about what might need to happen
  • Keeping each other informed at all times
  • Agreeing flexible working, for example, changing their working hours or working from home.

We would suggest that any agreement made should be put in writing so that there is clarity.

What if the business is affected so I have to consider laying people off?

The government is working hard to ensure that businesses and employees are protected and have put the Coronavirus Job Retention Scheme in place.  This will help you avoid making redundancies. Don’t forget, when all this is over you are going to need those employees who are already trained and part of your team, to come back to work.

During this time, you need to discuss the need to furlough them.  Once this decision is made and you access the scheme the employee cannot undertake work for you.  You will then be able to claim a grant of up to 80% of salary up to £2,500 per month.

If you are able you can top-up the extra 20% but you are not obliged to do so.

If you decide that you need to furlough your employees you need to have a conversation with them and tell them what you are proposing to do and why. To be honest in these uncertain times you cannot give your employees too much information, in our experience, people will panic because they feel like they don’t have enough information, so ne honest with them.

This is in essence a solution to a very big problem and reassuring them that you need to do this to make sure they have a job to come back to will make them feel valued. They will still receive 80% of their normal pay and they will, hopefully, still have a job to come back to.

The scheme is due to run for at least 3 months from 1 March, but the government will extend it if they deem it necessary.

How do you access the scheme?

All UK businesses are eligible.  The government and HMRC are working hard to set up a system for reimbursement – as let’s be fair they have the ability to take money off us but they don’t find it so easy to give it back to us.

HMRC are currently working on providing employers with a portal to use to claim back any reimbursed wages. We have not been told when they will roll this out but we’re sure they are working as hard as they can. if in the meantime, you don’t have enough money to keep your employees on the payroll, then you need to look at accessing a Coronavirus Business Interruption Loan. Information for which can be found here.

If you have specific questions regarding employees that are on maternity leave or off sick with another illness please ask us a question on here and we will respond as quickly as we can.

The content contained within this document has been obtained from information gathered from and and may have changed since publication and has been provided as a guide only.  You should always seek professional advice pertaining to your own individual circumstances.

For more specific details on how to furlough your employees, visit our How to Furlough Your Employees page.

For more guidance on the impact of coronavirus in the workplace, check our Employers’ duty of care page.

And for more around self-isolation and absence issues, click to our Self-isolation and absence page.

Want to know more about financial support during the coronavirus disruption? Then click to read the Financial Help for Businesses page.


Do you want to know how we can help you?

We would be happy to discuss your requirements and put the most appropriate package together for you.

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