Labour Research April 2012

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Law Queries

Guarantee pay

Q. Our employer is laying off some members of staff as orders from customers are unusually low. Although management does have a contractual right to do so, our main concern is over the pay arrangements. The employer has not been able to clarify what pay each of the laid off workers will receive. What entitlement do our members have?

A. Employees with a month’s continuous service who are laid off for a full day may be entitled to statutory guarantee pay.

Entitlement is conditional on an individual not refusing any suitable alternative work proposed by the employer.

Statutory guarantee pay is also conditional on an individual not refusing any reasonable alternative work from the employer, including work that is not in their contract, provided that such conditions are reasonable.

Statutory guarantee pay would not be due if employees have been laid off due to industrial action.

Currently the statutory scheme involves a maximum daily payment of just £23.50. However, this payment can only be made for a maximum of five days in a rolling three-month period, giving a maximum guarantee payment of £117.50 for five workless days.

Contractual arrangements may very well be more generous than the statutory scheme. Where the employer is being evasive, an examination of what payments have been made in previous periods of layoff should be helpful.


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