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What is a notice period? A guide for employers

Joel Upton  |  07 November, 2017

If you hire anyone you need to know what a notice period is and what the legal requirements are. So written just for you, here is a clear guide on notice periods.

The legal minimum - statutory notice period

Two types of notice periods are recognised by legislation: statutory and contractual. as an employer you have a legal obligation to give your employees a statutory minimum notice period. This varies on length of service:

  • One week's notice is required if the employee has been with you continuously for at least a month and up to 2 years

  • After two years of continuous employment, your employee is legally entitled to two weeks' notice

  • This then increases by a week for each further year of employment, up to a maximum of 12 weeks. For example, if an employee has worked for 7 years then you are required to give them at least 7 weeks' notice.

For employees it is different. The statutory notice period is set at a minimum of one week's notice and is not dependant on the length of service.

Protect yourself - contractual notice period

Contractual notice is the amount of notice set out in the contract of employment, which you have the freedom to set and can be longer than the statutory notice. It's important to include this in your employment contracts, if it's not included then the statutory minimum applies and you may be left with a senior member of staff leaving very quickly!

When deciding the length of contractual notice period it's crucial to consider the employee and to set the length in connection to the seniority of the role they're doing. Otherwise, you face a much higher possibility of the employee not working their notice period (or even signing the contract in the first place). A common notice period is one month.

Dismissal without notice

Summary dismissal is dismissal without notice where an employee is believed to have behaved in a manner that amounts to gross misconduct. Conduct so serious as to breach the contract of employment. This entitles you as the employer to terminate employment without the employee being allowed to work or be paid in lieu of their contractual notice period.

Fixed term contracts and notice periods

With a fixed-term contract, your employee will already know when their period of employment is due to end therefore no notice will need to be given. However, if you need to terminate the contract before its expiry date then the correct amount of statutory notice stated above should be given.

What do I do if my employee isn't working their notice period?

Unfortunately, in practical terms, you do not have a lot of options if your employee decides to not work their notice period. If your staff member has handed in their notice (or if you've given them notice) and they decide to just up and leave without working the time set out you cannot force them to work, even though they will likely be in breach of contract. In order to do anything about the breach of contract, expensive courts will need to be involved.

Giving notice and notice pay

Despite 'how it's always been done' notice does not need to be given in writing. However, it is encouraged, as giving notice orally cannot always be clear. Nevertheless if an employee hands in their notice you should put it in writing, confirming acceptance of the notice and outlining the next steps.

Once notice is given then it cannot be withdrawn. So if your employee changes their mind you are under no obligation to cancel the notice period. However, you are free to come to an agreement with the employee to withdraw the notice.

A notice period starts the day after the day that notice was given, for example, if a week's notice is given on Monday then the start of the notice period will be Tuesday and expire the following Monday.

During the notice period you are required to pay your employee their normal pay and benefits that are set out in the contract of employment. In certain circumstances 'payment in lieu of notice' can be given.

'Pay in lieu of notice' and 'garden leave'

This can be written into the contract of employment both you and your employee sign when they start working for you. It is essentially where you pay the employee the for the length of their notice, but asking them not to work.

This differs from garden leave which is a clause set out that your employee will be asked to not work, but also not start a new role until the end of the notice period. An employee still receives full pay and benefits while on garden leave, and they are 'on standby' if you need to call on them to work during the period. Garden leave is common with more senior positions.

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Employee not working notice period: what should you do?

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