Lay-off reasonableness

10 March 2016

Laying staff off can be a way of a business coping with a dip in workloads. It’s a temporary arrangement. So where a contract allows the employer to lay an employee off indefinitely and without pay, should it be implied that the period of lay-off will be no more than is reasonable?

Craig v Bob Lindfield & Son

Laying staff off can be a way of a business coping with a dip in workloads. It’s a temporary arrangement. So where a contract allows the employer to lay an employee off indefinitely and without pay, should it be implied that the period of lay-off will be no more than is reasonable?

Mr Craig had been laid off for four weeks. The employer was hopeful that things would pick up, but before that happened Mr Craig resigned and claimed constructive dismissal. The lay-off period had been too long, it was argued.

He lost. The Employment Appeal Tribunal held that reasonableness was not to be implied into the term of the contract. And, anyway, four weeks was not considered to be unreasonable.

That’s not to say that constructive dismissal will never apply in a lay-off situation. It depends on the circumstances. If an employer had certain motives for keeping workers off work – to maximise profits at the expense of employer/employee trust and confidence, for example - then there might well be a different outcome.


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