Posted by Gemma Ospedale, Partner
No implied term that a period of lay-off should be reasonable
In Craig v Bob Lindfield and Son Limited the EAT has held that there is no implied term of reasonableness in a contractual provision which allows employees to be laid off or put on to short term working for an indefinite period without pay. The EAT considered two conflicting EAT decisions and found that the Tribunal had correctly followed the later decision of Kenneth McRae and Co Limited v Dawson. This meant that the employee, who resigned after being laid off for about 5 weeks without pay, had not been constructively unfairly dismissed. There had been a genuine downturn in work which had led to the employer operating the contractual lay-off clause and the employer had properly followed the statutory scheme under which a redundancy payment does not have to be paid if there is a reasonable expectation that further work will become available within 4 weeks.