Can an employer lay off workers if it is in financial difficulty?

Employers have no statutory right to lay off employees or to keep them on short-time working. Employers in financial difficulties may ask employees to agree to being laid off or kept on short-time working, but may not take this action unless the employees agree, or it is provided for in the contract. Employees may be prepared to accept a period of lay-off or short-time working if they are aware that the alternative could be redundancies. The employees may be entitled to guarantee payments for the workless days.

Any employee who is laid off or kept on short-time working for four or more consecutive weeks, or for six weeks or more in a 13-week period (of which not more than three are consecutive) may claim a statutory redundancy payment. Employees are to be taken as having been laid off in any week if they are not provided with any work during that week and are not entitled under their contract to be paid any wages or salary in respect of that week.