Your employer can only do this if there is an express right to do so in your employment contract allowing for the right to be laid off without pay. If you are laid off in accordance with a contractual right to do so, you may be entitled to claim a statutory redundancy payment (if you have been employed for more than two years and have been laid off for 4 weeks continuously or 6 weeks in total) or a statutory guarantee payment (which is a form of compensation under law available to employees for up to 5 “workless days” in a three month period).
If there is no contractual right to lay you off without pay in your contract, and this has not been otherwise agreed between you and your employer, then you should be paid for this time. If employers do forcibly lay off employees on no or reduced pay without a contractual right or express agreement to do so, it would likely be a fundamental breach of contract, meaning that the employee could sue for unpaid wages or resign and claim constructive dismissal.
Businesses can still make redundancies in the normal way, and current employment rights, protections and obligation will continue to apply. However, employers will be reluctant to do this because they will want to retain staff for when things get back to normal.
The alternative for many employers is therefore to rely on so-called “furlough leave”. On 20 March 2020 the government announced the creation of the Coronavirus Job Retention Scheme. This allows employers to “furlough” their employees as an alternative to making them redundant. They can then apply to HMRC for a grant of up 80% of the wages of each “furloughed” employee up to a maximum of £2,500 per month.
