Lay-off and short-time: claiming redundancy pay (UK)

When automation, a lost contract or a failed system rollout cuts the work available, some employers do not dismiss straight away. They lay staff off without pay, or cut hours, and wait. The law sets a limit on how long that can go on before an employee can walk away with a redundancy payment, even though nobody has been dismissed. The route has strict written steps and short deadlines, so it helps to know them before the weeks run out.

The short answer: an employee who has been laid off or kept on short-time for four or more weeks in a row, or for six or more weeks within thirteen, can give written notice of intention to claim a redundancy payment, then resign with the required notice and claim it (Employment Rights Act 1996, s148 and s150). The employer can contest the claim with a counter-notice within seven days (s149).

What counts as lay-off and short-time

An employee is laid off for a week if their pay under the contract depends on being given work of the kind they are employed to do, and they are not entitled to any pay for the week because the employer provides no such work (s147(1)). They are kept on short-time for a week if, because less of that work is provided, their pay for the week is less than half a week's pay (s147(2)). Lay-off weeks and short-time weeks can be combined to meet the tests (s154(a)). Weeks wholly or mainly caused by a strike or lock-out do not count (s154(b)). For pay on individual days without work, see guarantee pay.

The two tests

• Four in a row: laid off or on short-time for four or more consecutive weeks (s148(2)(a)).
• Six in thirteen: a series of six or more such weeks within thirteen, of which not more than three were consecutive (s148(2)(b)).

In both cases the last qualifying week must have ended on, or not more than four weeks before, the date the employee serves the notice of intention to claim. Waiting too long after the weeks end loses the claim on those weeks. The usual conditions for a redundancy payment, such as two years' continuous employment, still apply; see redundancy pay.

The steps and deadlines

1. Notice of intention to claim: the employee gives the employer written notice, in whatever terms, that they intend to claim a redundancy payment in respect of lay-off or short-time (s148(1)).
2. Counter-notice: within seven days of that notice, the employer may give written counter-notice that it will contest liability (s149). If it does and does not withdraw it, the employee is paid only if an employment tribunal decides they are entitled.
3. Resignation: the employee must end the contract by giving one week's notice, or the minimum the contract requires if that is longer, before the end of the relevant period (s150). The relevant period is three weeks after the employer's seven days end if no counter-notice is given, three weeks after a counter-notice is withdrawn, or three weeks after the tribunal notifies its decision if the question goes to a tribunal.

If the employer dismisses the employee instead, this route closes, but any right to a redundancy payment for the dismissal itself is unaffected (s151).

The employer's defence

The claim fails if, on the date the notice was served, it was reasonably to be expected that within four weeks the employee would start a period of at least thirteen weeks without any lay-off or short-time, and the employer gave counter-notice within seven days (s152(1)). That defence does not apply if the employee in fact stayed on and was laid off or on short-time for each of the next four weeks (s152(2)). For a business planning to bring work back, perhaps once a new system is running, this is the point at which it must be able to show a realistic return to full work.

For working out the payment, the relevant date is the end of the last of the qualifying weeks before the notice was served (s153).

Practical steps

• Employers: lay-off under these rules depends on a contract under which pay depends on work being provided, so check the contract first. Track lay-off and short-time weeks per employee against both tests, diarise the seven-day counter-notice deadline when a notice arrives, and keep evidence of any expected return to full work.
• Employees: keep a week-by-week record of days and pay. Serve your notice of intention to claim in writing within four weeks of the last qualifying week, keep a copy, and diarise the dates for resigning. Do not resign before the notice process is followed, or the claim on this route can be lost.

These sections extend to England, Wales and Scotland. This page is general information on the law in Great Britain as at 1 November 2026, not legal advice.