Pay not always ‘guaranteed’
By Siobhán Harding
Published 24/11/2008 | 11:13
Following on from last week’s article about lay-offs and short-time working, this article will look in more detail at the issue of guarantee payments.
Guarantee payments are made to employees who are laid off or put on short-time working and guarantee that pay will not fall below a certain level.
The employee’s contract may include provisions for contractual guarantee payments if they are laid off or put on short-time working.
If this is not included in their contract, they may have a right to claim a statutory guarantee payment from their employer.
A statutory guarantee payment will only be made if the employee is given no work to do because there is a shortage in the kind of work they are employed to do (or there is any other occurrence which affects the normal working of the business in relation to this type of work) and if there has been a whole day when the employee was given no work.
They are not required to be made for days in which some work is provided even if that work is provided outside normal working hours.
An employee can only claim a statutory guarantee payment if they have been employed for at least one month by the day before the first day there is no work.
Statutory guarantee payments can only be made for a maximum of five days in any three month period.
In cases in which an employee works less than five days in a normal week, their entitlement cannot be more than the number of days the employee is required to work — for example, if an employee normally works a four day week their entitlement is limited to four days in any three month period.
If hours of work vary from week to week an average will be taken over the 12 complete working weeks preceding the week in which the lay-off occurred.
Rates of guarantee payments are low and are calculated by multiplying the number of normal working hours by the ‘guaranteed hourly rate' which is subject to a set maximum (currently £20.40 per day).
The right to a statutory guarantee payment is lost if the lay off or short time working is the result of an industrial dispute involving other employees of the business.
This is the case even if the employee is not involved in the dispute. If the employee refuses an offer from the employer of suitable alternative employment, which need not be work they are contractually employed to do, or if they refuse to comply with a reasonable requirement imposed by the employer to ensure that their services are available, then they will lose the right to a guarantee payment.
If an employee does not receive a guarantee payment they feel they are entitled to, they have the right to make a complaint to an industrial tribunal.
Any such complaint must be made within three months of the day for which the employer has not made a guarantee payment, but industrial tribunals have discretion to accept complaints made after the three-month period if they consider that it was not reasonably practicable for the employee to have made a complaint earlier.
For more information on guarantee payments or on lay-off and short-time working, contact your local CAB or from the Department for Employment and Learning by telephoning 02890 257580 or from its website at www.delni.gov.uk/er.
Siobhán Harding is an Information and Policy Officer with Citizens Advice