Emergency closure of business premises

Q We had to close our business premises down for three days last week because one of the internal ceilings collapsed. Employees were sent home for this period until the necessary repairs and checks on the other ceilings had been completed. Are we obliged to pay the employees for these days?

A If you have to temporarily close your business premises because of unforeseen circumstances such as fire, flooding, collapsed ceilings or a power supply failure, and there is no work available for the employees as a result, this is a lay-off. Unless you have a contractual right to lay off your staff without pay (other than statutory guarantee payments), or your employees expressly consent to being laid off without pay, then they are entitled to receive their normal pay for the duration of the lay-off. If you fail to pay them and they resign as a result, and if they have been employed for one year or more, then they may claim constructive dismissal on the ground there has been a fundamental breach of their contract of employment. Your employees are also eligible to claim unauthorised deductions from wages without the requirement of resignation and regardless of the length of their employment.

Where the employees’ contracts of employment contains an express contractual right for you to impose a lay-off without pay or they consent, they are, subject to certain exceptions, still entitled to receive a guarantee payment for any complete day of lay-off. Guarantee payments are limited to a maximum of five days’ payment in any three-month period. If the employee is, however, normally required to work less than five days a week, the entitlement cannot exceed the number of days they are required to work per week under their contract. The amount of guarantee payment per day is based on the employee’s normal daily rate of pay, up to a current statutory maximum of £21.50 per day.

Some employees are not entitled to a guarantee payment. These are: those who have worked for you for less than a month ending with the day before the workless day; those who unreasonably refuse an offer of suitable alternative employment for the workless day – whether or not it is work that they are employed to perform under their contract of employment); those who fail to comply with your reasonable requirements imposed with a view to ensuring they are available for work; and those who are not provided with work because of a strike or industrial action.

Claire Birkinshaw, solicitor, Abbey Legal Protection

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