Salon workers win £240k after being laid off without pay
Eleven salon workers were awarded over £240,000 after their employer laid them off without pay, leading to constructive unfair dismissal and breach of contract claims.
1 min read · Last updated 18 May 2026
Case details
Key facts
- The claimants were employed by the First Respondent, Group Momentum (Salons) Limited.
- The First Respondent purported to lay off the claimants from 17 September to 15 October 2020.
- The claimants resigned and claimed constructive unfair dismissal.
- The tribunal found that the claimants were not transferred to the Second Respondent under TUPE.
- The claims against the Second and Third Respondents were dismissed.
- The claimants were awarded statutory redundancy payments, unlawful deductions, holiday pay, notice pay, and compensatory awards.
Timeline
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Lay-off period begins
The First Respondent purported to lay off the claimants from this date.
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Lay-off period ends
The purported lay-off period ended.
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Termination of employment
The claimants' employment terminated on or around this date.
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Hearing day 1
The tribunal hearing commenced via CVP video.
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Hearing day 2 and judgment
The tribunal concluded the hearing and issued judgment.
The legal issue
The tribunal had to decide whether the employer's decision to lay off employees without pay for a month, without contractual authority or consultation, constituted a repudiatory breach entitling them to resign and claim constructive unfair dismissal, and whether they were entitled to redundancy payments, unlawful deductions, holiday pay, and notice pay.
The outcome
The tribunal ruled in favour of the claimants, finding that Group Momentum (Salons) Limited had breached the employment contract by imposing a lay-off without pay. The claims against the second and third respondents were dismissed as there was no TUPE transfer or liability.
Compensation breakdown:
- Statutory redundancy payments: varied per claimant
- Unlawful deductions (lay-off period wages): varied
- Holiday pay: varied
- Notice pay (10-12 weeks): varied
- Compensatory awards for unfair dismissal: up to £29,680
- Total awarded: £240,406.51
Lessons & takeaways
- Employers cannot unilaterally lay off employees without pay unless the contract allows it; doing so is a fundamental breach that may justify constructive dismissal claims.
- Employees who are laid off without pay should seek legal advice promptly, as they may have claims for unlawful deductions and constructive unfair dismissal.
- Even without a redundancy process, employees may be entitled to statutory redundancy payments if the lay-off effectively ends their employment.
- Claimants can represent themselves in tribunal, but having representation can help navigate complex claims like constructive dismissal.
- Employers who fail to attend the hearing risk a default judgment and substantial awards against them.
When a lay-off becomes a dismissal
In September 2020, Group Momentum (Salons) Limited told its salon workers they were being laid off for a month without pay. For the employees, this was not a temporary pause but the end of their employment. They resigned and brought claims for constructive unfair dismissal, arguing that the company's actions had destroyed the trust and confidence needed to continue working.
The tribunal agreed. It found that the employer had no contractual right to impose an unpaid lay-off, and that doing so was a fundamental breach of contract. The workers were therefore entitled to resign and claim they had been constructively dismissed. The company also failed to follow any redundancy procedure, meaning the dismissals were automatically unfair.
What the employer could have done differently
The employer's main error was acting without legal authority or consultation. If the company had checked the employment contracts, it would have seen there was no lay-off clause. Even if there had been, a proper consultation process and consideration of alternatives—such as furlough under the Coronavirus Job Retention Scheme—might have avoided the breach. Instead, the employer did not attend the tribunal hearing, leaving the claims uncontested.
Why this case matters
This case is a reminder that a lay-off is not a free pass for employers. Without a clear contractual right, imposing unpaid leave is a serious breach that can give employees the right to resign and claim unfair dismissal. The total award of over £240,000—including redundancy pay, unpaid wages, holiday pay, notice pay, and compensation for the unfair dismissal—shows the financial risk of getting this wrong. For employees, it highlights that resigning in response to a fundamental breach can be a valid route to compensation, even without a formal redundancy process.
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