Orders have collapsed. Can I lay staff off or cut their hours temporarily?

The answer Just Ask, HR gives

Detailed Dan — Structured and thorough — every step in order.

Lay-off (no work, no wages for a period) and short-time working (reduced hours/pay) are genuinely useful bridges — with one large precondition and several tripwires.

The precondition: a contractual right. You can only impose unpaid lay-off or short-time if the employment contract contains a lay-off/short-time clause. Check now. Without one, imposing it unilaterally is an unlawful deduction from wages and potentially constructive dismissal — your lawful routes then become agreement (many staff will accept temporary reductions over redundancy if you're honest about the situation) or a formal, consulted variation of contract.

If you do have the right (or agreement):

1. Statutory guarantee pay applies on workless days: a capped daily amount (check the current rate on gov.uk) for up to 5 workless days in any 3 months. After that, workless days can be unpaid.
2. Keep it demonstrably temporary. Communicate review dates. This is a bridge, not a destination.
3. Know the employee's exit right: after 4 consecutive weeks of lay-off/short-time (or 6 weeks in any 13), employees can serve notice claiming a statutory redundancy payment — you can counter within 7 days only if normal work is genuinely expected to resume within 4 weeks and last at least 13 weeks.
4. Holiday continues to accrue throughout, and staff can request (or you can require, with double-length notice) that holiday is taken during the lay-off — a useful way to keep some pay flowing.

Strategic point: if the work genuinely isn't coming back, don't use lay-off to defer the inevitable — it burns goodwill and adds guarantee-pay cost before the redundancy consultation you'll run anyway. Lay-off is for a pause, redundancy is for a stop. Be honest with yourself about which this is.