Every company has to deal with their employees leaving at some point: it’s an inevitable part of running a business. What isn’t as inevitable, fortunately, is the disruption that a departing employee can cause. That’s something that a company has some influence over, and an employee’s notice period plays a large part in that.
The question is, just how long does an employee’s notice period have to be? In the context of a notice period UK, both statutory notice and contractual notice periods apply, and the period in the UK is governed by statutory requirements. Statutory notice is the legal minimum period required by law, and both you—the employer and the employee—are legally obligated to provide notice as per these statutory requirements. Typically, written notice is required to formalize the end of employment. The standard notice period and reasonable notice expectations in the UK can vary depending on the length of service and the terms of the employee’s contract. Do you have to give a member of staff adequate notice if you’ve decided to part ways with them, and do they have to do the same for the company? To answer these questions and more, this post looks into how to calculate an employee’s notice period at the end of their employment, including the importance of reviewing the employee’s contract and any contractual agreements regarding notice. Specific circumstances, such as gross misconduct or redundancy, may affect notice requirements, and senior positions often have longer notice periods specified in their contracts. During the notice period, employees may need to balance their job search with their responsibilities to their current employer. In some cases, early termination may occur, and employment may end with immediate effect.
Introduction to Notice Periods
A notice period is a fundamental part of employment in the UK, designed to give both employers and employees a fair and reasonable timeframe to prepare for the end of an employment relationship. Whether you’re an employer planning for business continuity or an employee considering a new job, understanding notice periods is essential. Notice periods allow employers to find suitable replacements and ensure a smooth handover, while employees get the time they need to search for new opportunities and wrap up ongoing projects.
In the UK, notice periods are governed by both statutory minimum notice period requirements and the terms set out in the employment contract. The statutory minimum notice is the legal minimum that must be provided, and it increases with the length of continuous employment. For example, after one month of service, employees are entitled to at least one week’s notice, with the period increasing for longer service. However, if the employment contract specifies a longer notice period, the contractual notice period takes precedence, and employers must adhere to the longer of the two.
To avoid confusion and ensure compliance, many employers and HR professionals use a notice period calculator or notice period calculator tool. This helps determine the correct notice period based on the employee’s length of service and the terms of their employment contract. By understanding and planning for notice periods, both employers and employees can ensure a positive working relationship and a smooth transition when employment ends.
How much notice does an employee have to give?
A lot, if not most, of the time, the length of an employee’s notice period will be stated in their employment contract. If not, they’re obliged to give you the statutory minimum when they’re leaving the company and must provide notice before ending their employment. Similarly, you’re obliged to give them the same amount of notice if you’re terminating their contract. Employees are typically required to provide weeks notice or a week’s notice depending on their length of service.
Statutory minimum notice periods are as follows:
- Less than 1 month: Not necessary – there is generally no legal obligation to give notice, but best practice may still recommend it
- 1 month – 2 years: 1 week – after more than a month of service, at least one week’s notice or one week is required, and the week notice increases with service length
- 2 – 12 years: 1 week for every year of employment (capped at 12 weeks’)
So, in general, the longer an employee has been with a company, the longer their notice period will be. Some contracts may require a month’s notice, one month’s notice, or a month notice period, especially for certain roles or senior positions. All things considered, it’s best – for the business and your employees – to include notice periods in your company’s employment contracts and to make employees aware of the length when they first begin their employment. In some cases, a shorter notice period can be negotiated and agreed upon. It ensures everyone is on the same page and avoids any potential friction if they decide to seek employment elsewhere.
Zero-hour contract workers
However, there’s also the interesting matter of zero-hour contracts workers. Technically, those on zero-hour contracts are considered workers as opposed to employees and have different employment rights – including those surrounding notice. Now, legally, you’re under no obligation to give workers on zero-hours contracts any notice but doing so is a simple professional courtesy that gives them a chance to look for another job. Plus, not only is it considerate and fair but it also preserves your professional relationship in case you need them in the future.
On the other hand, zero-hour contract staff don’t have to work their notice: they could just not agree to any shifts during their notice and, in essence, leave before the period is up. That doesn’t mean you can just stop offering them work, however, as it could cause them to claim discrimination and take your company to an employment tribunal. For this reason, it’s best to give zero-hour contract workers the legal minimum notice as a protective measure at the very least.
Salary, benefits, and perks during this period
Employees receive their normal salary during their notice period. If an employee’s wages tend to fluctuate, then they’ll be paid an average of what they earned over the last 12 weeks. Also, if circumstances have resulted in a staff member being on furlough, they’re entitled to 100% of their salary during their notice period, not the 80% rate they may have been paid while on furlough. Employees are entitled to notice pay for the duration of their notice period.
Now, in regards to benefits, employees are still allowed to take annual leave during their notice period and are still entitled to any other perks stipulated in their employment contract. Pension contributions and other contractual benefits should continue during the notice period. In the event they have any outstanding holiday allowance when they leave the company, they should be compensated for it in full in their final salary payment. The final pay must include all outstanding entitlements, including holiday pay.
In cases of redundancy, employees may also be entitled to statutory redundancy pay in addition to their notice pay.
Payment in lieu of notice (PILON)
Alternatively, if your company doesn’t want an employee to work during this time, for whatever reason, they’ll receive PILON instead. This will be the same amount they would have earned during their this period, along with outstanding annual leave, commissions, bonuses, etc.
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Garden Leave
Garden leave, sometimes referred to as gardening leave, is a specific arrangement that can be used during an employee’s notice period. When an employee is placed on garden leave, they remain employed and continue to receive their normal pay and contractual benefits, but they are not required to attend the workplace or carry out their usual duties. Instead, they may be asked to stay at home or work remotely.
Employers often use garden leave to protect their business interests, especially when an employee is leaving for a competitor or holds a senior position with access to sensitive information. By keeping the employee away from the business during the notice period, employers can reduce the risk of confidential information being shared or business relationships being disrupted.
The terms of garden leave are usually set out in the employment contract, but they can also be agreed upon at the time notice is given. It’s important for both employers and employees to understand the duration, pay, and any restrictions that apply during garden leave, such as not starting a new job with a competitor. If you’re unsure how long the notice period should be, including any garden leave, a notice period calculator or notice period calculator tool can help clarify the correct timeframe based on your employment contract and length of service.
Employment Contracts and Notice Periods
Employment contracts are the foundation for determining notice periods in the UK. These contracts outline the specific terms and conditions of employment, including how much notice must be given when employment ends. The notice period stated in the employment contract may be a week’s notice, a month’s notice, or even a longer notice period for senior employees or specific roles.
Both employers and employees should carefully review their employment contracts to understand their rights and obligations regarding notice periods. Contracts may also include provisions for payment in lieu of notice (PILON), which allows the employer to pay the employee instead of requiring them to work through the notice period. This can be useful for ensuring a smooth transition, especially in situations where it’s best for the employee to leave immediately.
It’s important to remember that the contractual notice period cannot be shorter than the statutory minimum notice period set by UK employment law. If the contract specifies a longer notice period, that longer period must be honored. To avoid misunderstandings and potential disputes, both parties should use a notice period calculator or notice period calculator tool to confirm the correct notice period based on the contract terms and the employee’s length of service. By understanding and following the notice requirements in employment contracts, employers and employees can ensure a positive and professional end to the employment relationship.
