The claimant was employed as a hair stylist and worked 24 hours per week. The respondent decided to relocate premises, and initially offered the claimant reduced hours. The claimant was subsequently offered a new contract with the full 24 hours and it included a ‘shortage of work’ clause.

The claimant was not happy with the clause as it would have contractually enabled the respondent to send her home without pay. The claimant did not sign the contract and claimed that it was not a true reflection of her terms and conditions of employment. She argued that the reduction in hours, change of location and reduced wages represented a fundamental breach of her contract of employment and that it constituted constructive dismissal.

The tribunal found that the respondent had unilaterally varied the contract by inserting the shortage of work clause.  The tribunal rejected the respondent’s contention that the contract was unchanged and that the claimant’s job was available.  The introduction of the shortage of work clause was a new feature which effectively permitted the respondent to reduce the claimant’s hours of work and reduce her pay accordingly. The tribunal found that the claimant had been constructively dismissed.

Practical Lessons

Many employers can relate to downturns in business meaning fewer staff hours are required. But providing for this in employees’ contracts must be approached with caution.

There is a recognised right at common law to tell employees not to arrive for work but there is no general right not to pay them. This notion of ‘short-time working’ can only be imposed where there is a corresponding contractual right to do so or, although less likely, through custom and practice.

Unilaterally imposing short-term working on employees is risky and employers are better off being up-front with employees. A lot of redundancy policies will outline the employer’s responsibility to consider short-time working first as an alternative to redundancies and this may assist in securing the consent of affected employees.
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