Reducing staff working hours

Hello there. I can certainly help you look into this. When business is slow, it is completely understandable that you need to find ways to manage your costs. However, reducing staff hours is a change to their employment terms, so you have to handle it carefully to avoid employment tribunal claims.

The legal position:

Generally, you cannot simply cut an employee's hours without their permission, unless their employment contract specifically allows you to do so.

If you check their contracts, you are looking for a short-time working clause or a lay-off clause. If this clause exists, it gives you the legal right to reduce their hours or pay temporarily when there is not enough work.

If you reduce their hours using one of these clauses, you still need to be aware of Statutory Guarantee Pay. This is a minimum daily amount the government says you must pay staff on certain days they would normally work but have been given no hours.

If there is no short-time working clause in the contract, reducing their hours without their agreement would be a breach of contract. This means the employee could resign and claim constructive dismissal, or stay and bring a claim for the unlawful deduction from their wages.

Practical next steps:

1. Check the contracts
Look at the written statements of employment or contracts you gave your team. Check if there is a specific clause dealing with short-time working or lay-offs.

2. Talk to your staff
Even if you do not have a written clause, the best approach is often to sit down with your team. Explain that business is quiet and you need to reduce hours temporarily to protect the business and their jobs in the long run. Many employees will agree to a temporary reduction if it means avoiding a worse outcome.

3. Get it in writing
If your staff agree to reduce their hours, make sure you write down exactly what has been agreed, how long the reduction will last, and when it will be reviewed. Ask them to sign it so you have a clear record of their consent.

4. Consider alternatives if they refuse
If staff do not agree to the reduction and you do not have a contract clause, you will need to look at other options. This usually means starting a formal redundancy process, where reducing hours might be offered as an alternative to losing their job entirely.

There is also the option of dismissing them and offering to re-employ them immediately on the new reduced hours. However, the government has recently introduced a strict statutory code of practice on fire and rehire, making this a legally risky route that requires careful formal consultation, so it should only be used as a last resort.

Missing facts to keep in mind:

To give you a completely precise answer, I would need to know exactly what is written in your staff contracts and how long you expect the quiet period to last. Prolonged periods of short-time working or lay-offs can eventually trigger a situation where employees can legally resign and claim a redundancy payment, so reducing hours is usually best used as a short-term fix rather than a permanent solution to a quiet business.