An employee who is not provided with
work throughout a day during which he
would normally be required to work under
his contract of employment is entitled
to be paid a guarantee payment by his
employer if: there is a reduction in the
requirements of the employer's business
for work of the kind which the employee
is employed to do; or there is any other
occurrence which affects the normal
working of the business in relation to
this type of work.
However, the entitlement to a guarantee
payment is also subject to the following
provisos:
- guarantee payments can be
made only in respect of a
complete working day lost they
are not required to be made in
respect of a day in which some
work is provided, even if that
work is provided outside normal
working hours;
- an employee must comply with
any reasonable requirements
imposed by an employer to ensure
that his services are available;
- an employee must not
unreasonably refuse an offer
from an employer of suitable
alternative work (which need not
be work he is under his contract
employed to perform) ;
- an employee will not be
entitled to a guarantee payment
if the failure to provide him
with work is a result of a
strike, lock-out or other
industrial action involving any
other employee of his employer
or of an associated employer.
These provisions do not
affect the question of whether
or not an employer is entitled
to put an employee on short time
or temporary lay-off which is
unpaid or at lower than average
levels of pay.
Such entitlement is
determined by individual
contracts of employment.
The provisions do not cover:
- anyone who is not an
employee - for example,
self-employed or freelance
workers;
- an employee who
ordinarily works outside
Great Britain under his
contract of employment - but
most employees on offshore
oil and gas installations in
British sectors of the
Continental Shelf are
covered by the provisions;
- an employee employed for
a fixed term of three months
or less, or engaged for a
specific task which is not
expected to last for more
than three months, and
where, in either case, he
has not been continuously
employed for more than three
months before the day for
which a guarantee payment
would otherwise be payable;
- anyone who has not been
continuously employed by his
employer for at least one
month before a day for which
a guarantee payment would
otherwise be payable;
- an employee who has no
normal working hours
prescribed by a contract of
employment, for example some
insurance agents and sales
representatives;
- masters and crew members
engaged in share fishing who
are paid solely by a share
in the profits or gross
earnings of a fishing
vessel; and members of the
police service and armed
forces.
Continuous employment
A period of continuous
employment forms the basic
qualification for most
individual rights under the
employment protection
legislation, including the
right to receive a guarantee
payment.
The rules for reckoning a
period of continuous
employment are set out in
the Department of Trade and
Industry booklet "Rules
governing continuous
employment and a week's
pay".
Limit on entitlement to
guarantee payments.
The statutory entitlement
to a guarantee payment is
limited to five days in any
period of three months,
except where under the
contract of employment an
employee is normally
required to work less than
five days in a week. (In
that case the entitlement
cannot exceed the number of
days the employee is
required to work by that
contract).
To establish whether or
not an employee is entitled
to a guarantee payment in
respect of a day of lay-off
it must be determined how
many days of guarantee pay
(if any) have been allowed
in the three month period
ending with the day in
question.
Only if the employee had
received fewer than five
days of guarantee pay in
that period would a payment
be due. If the days of the
lay-off are not consecutive,
the three-month period must
be calculated separately for
each day.
Where the number of days
worked varies from week to
week, the average number of
days worked over the
preceding 12 complete
working weeks should be
determined.
The calculation should be
based on the contract of
employment in force on the
day for which guarantee
payment is due, unless a new
contact has been entered
into as a result of
short-time working. In that
case, the contract in force
before short-time working
began should be used for the
purpose of calculation.
The Secretary of State
may vary by order the limits
applicable to the specified
number of days and of the
period to which they relate.
Amount of payment.
The amount of guarantee
payment for any day is
calculated by multiplying
the number of normal working
hours for the day in
question by the guaranteed
hourly rate. However, this
amount is subject to an
upper limit for any one day.
The limit is varied annually
in line with Retail Prices
Index.
The calculations should
be based on the contract of
employment in force on the
day in question. However, if
this is varied or a new
contract introduced as a
result of short-time
working, the calculation
should be based on the
contract in force
immediately before the
short-time working began.
Normal working hours.
The normal working hours
should be clear from an
employee's written statement
of employment particulars
taken together with any
relevant collective
agreement. They may include
overtime hours, where the
contract of employment
requires both the employee
to work them and the
employer to provide and pay
for overtime work.
Guaranteed hourly rate.
The guaranteed hourly
rate is the amount of one
week's pay divided by the
number of normal working
hours in a week. If either
the hours or the pay (or
both) vary from week to
week, they are averaged over
the preceding 12 complete
working weeks. If an
employee with variable hours
or pay has not been employed
for 12 complete weeks the
averages are estimated in
the light of what could
reasonably have been
expected from the contract
of employment and by
reference to the work
pattern of fellow employees
in comparable jobs.
Effect of contractual
guarantee payments.
Any payment already made
under an employee's contract
of employment, for example,
as a result of a collective
agreement on guarantee pay,
will be offset against the
employer's liability under
the law.
Conversely, if a
statutory payment has been
made by an employer for a
workless day, this will
reduce any liability there
may be under the employee's
contract of employment.
If the contractual
guarantee pay for a workless
period is not directly
related to a particular day
(for example it is on a
weekly rather than a daily
basis) the proportion of the
contractual guarantee pay
which is attributable to
each day is the proportion
which that day bears to the
workless period.
If an employee receives
payment for a week covering
both work actually done and
contractual guarantee pay,
the amount paid in respect
of periods in which work was
done should be identified
and subtracted from the
total. The remainder will
represent guaranteed
remuneration and, for
purposes of comparison with
statutory amounts due,
should be divided
proportionately over the
workless period as outlined
above.
Effect on Jobseekers
Allowance.
Under Jobseekers
Allowance guarantee payments
payable under:
- the statutory
provisions on guarantee
pay; or
- an exempted
collective agreement on
guarantee pay; or
- any other collective
agreement on guarantee
pay which obliges
employees to make their
services available on
the day in question are
taken into account as
earnings. This applies
to both contributory and
income-based Jobseekers
Allowance. To find out
more contact your
Benefits Agency local
office.
Dismissal for seeking
to enforce the right to
a guarantee payment.
Dismissal of an
employee for seeking to
enforce the rights
outlined in this
document, either by
making a complaint to an
employment tribunal or
by alleging that the
employer has infringed
those rights, is
unlawful. An employee
dismissed in these
circumstances is
entitled to make a
complaint of unfair
dismissal to an
employment tribunal,
regardless of length of
service. This applies
whether or not the
employee did in fact
qualify for the rights
in question and whether
or not they had in fact
been infringed, provided
that the individual
acted in good faith.
Complaint to an
employment tribunal.
An employee who does
not receive guarantee
pay to which he
considers he is entitled
can complain to an
employment tribunal. A
complaint should be made
within three months of
the day for which the
employer has not made a
guarantee payment, but
employment 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.
An employee who
wishes to complain to a
tribunal should obtain
from any Job Centre an
application form IT1
(IT1 (Scot) in Scotland)
and an explanatory
leaflet "How to apply to
an employment tribunal"
which gives guidance on
making an application to
a tribunal).
Conciliation.
The tribunal will
send a copy of the
completed application
form to a conciliator of
the Advisory,
Conciliation and
Arbitration Service
(ACAS), who will attempt
to promote a settlement
of the complaint without
the need for a tribunal
hearing. In the absence
of a formal complaint
the services of a
conciliator will also be
available where an
individual believes that
his employment rights
have been infringed.
Either the employee
or employer can request
such involvement through
one of the regional
offices of ACAS.
Information given to
conciliators in the
course of their duties
will be treated as
confidential. It may not
be divulged to the
tribunal without the
consent of the person
who gave it.
Tribunal hearing.
Where conciliation
does not take place or
fails, the tribunal will
hear the complaint. Both
parties should attend
and may claim travelling
and other expenses,
including loss of
earnings. Tribunal
proceedings are
conducted informally and
in such a way as to make
it easy for individuals
to conduct their own
cases if they wish. The
parties may be
represented by anyone
they wish, including a
representative of a
trade union or
employers' association.
Where a tribunal finds
the complaint justified
it will order the
employer to pay the
employee the amount of
guarantee payment due.
Decision of tribunal.
Where an employment
tribunal finds in favour
of the employee, it will
normally order the
employer to pay the
amount of guarantee
payment due. Before
doing so, the employer
must deduct any
Jobseekers Allowance
paid to the employee for
any part of the period
covered by the award.
The amount that is
deducted is to be repaid
to the Benefits Agency.
Details of the amount of
Jobseekers
Allowance/income support
paid during the period
will be sent to the
employer on a document
called a "recoupment
notice", copies of which
will be sent to the
employee. Only when this
notice (or a letter from
the Benefits Agency
stating that there will
be no recoupment) has
been received can the
employer pay the award,
or part of the award, to
the employee.
Exemption from the
guarantee pay
provisions.
Exemption from the
statutory provisions for
employers and employees
who have their own
collective agreement
covering guaranteed pay
may be granted by the
appropriate Minister,
provided that:
- the application
for exemption is
made by all parties
to the agreement;
- the appropriate
Minister is
satisfied that the
relevant statutory
provisions should
not apply to them,
in the light of the
terms of their
agreement;
- the agreement
either provides
complaints
procedures which
include a right to
independent
arbitration in the
event of deadlock or
indicates that
employees may
present complaints
under it to an
employment tribunal
- in which case the
tribunal would have
jurisdiction over
the agreement.
If each provision
of the agreement is
at least as
favourable as the
corresponding
statutory provision
there is no need for
exemption, but if,
for example,
employers and
employees would
prefer to employ
their own complaints
procedure (including
a right to
independent
arbitration) rather
than an employment
tribunal, then an
exemption order
would still be
required.
Entitlement to a
redundancy payment.
In certain
circumstances an
employee who is laid
off or put on short
time may be entitled
to claim a
redundancy payment.
Entitlement to
wages.
If you believe
that you have not
received all of the
wages due to you
under your contract
of employment you
may be able to make
a complaint to an
employment tribunal
under Part II of the
Employment Rights
Act 1996.
A day is defined
as the period of 24
hours from midnight
to midnight. Where a
period of employment
normally extends
over midnight, for
example in the case
of shift work, it is
treated as falling
wholly on the first
day if more hours
are normally worked
on the first day
than the second day;
otherwise it is
treated as falling
wholly on the second
day.
Any two employers
are to be treated as
associated if one is
a company of which
the other, directly
or indirectly, has
control, or if both
are companies of
which a third
person, directly or
indirectly, has
control.
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