What is a Notice Period?

By Anthony Wolny | 4th July 2018 | 13 min read

In the UK there are processes for dealing with employees or employers who wish to terminate an employment contract. One of these is notice periods.

A notice period is the amount of time between an employee handing in their resignation, and actually leaving a company. A notice period also applies to an employer who wishes to terminate an employee’s contract.

Statutory or Contractual Notice Period

In the UK, there are two types of notice period: statutory notice and contractual notice. Statutory notice is the legal minimum notice an employee or an employer can give.

Employers should give one week’s notice if an employee has been employed continuously for more than a month but less than two years. After two years’ continuous employment an employer should give two weeks’ notice, plus an additional week for each subsequent year completed, up to a maximum of 12 weeks.

An employee must give their employer a minimum of one week’s notice once they have worked continuously for one month. This minimum remains the same, no matter how long an employee has worked beyond one month.

Contractual notice (providing it is longer than the statutory minimum) can alter the amount of notice an employer or an employee must give. For example in the UK, it is common for an employer to state in a contract of employment that one month’s notice is required to terminate the contract.

Notice periods for employers

An employee may hand their notice in for a multitude of reasons, or there may be times when it is necessary to let an employee go, but whatever the circumstances, you must remain fair. It is important to treat all employees with respect, as it could be a difficult time for them. Handling a termination of employment can be straightforward, but if done incorrectly can initiate tribunals proceedings.

Whilst we cannot offer legal advice, we have detailed a few things you could do to help to ensure fairness during termination.

How to give notice:

Within your standard employment contract, you should detail how notice should be given, i.e. whether it must be in writing or whether it can be given verbally.

How much notice do I need to give?

When working out how much notice must be given, always check your employment contract. In the UK, common notice periods are two weeks or one month. Although this can vary, and more senior positions may require longer notice periods. Providing it is longer than the statutory minimum, you can set your own notice periods in your employees’ contracts.

What are employees entitled to during their notice period?

During their notice period, an employee is entitled to all of the same contractual benefits as normal, which includes their regular pay and holiday entitlement.

What happens if an employee doesn’t give enough notice?

If an employee doesn’t give enough notice, they could be in breach of contract, and you may be able to take the case to court to recover damages for areas such as lost revenue. It is always best to check with a legal professional if you believe an employee has not given enough notice.

How do I shorten a notice period?

An employee may ask to shorten their notice period, and whether you allow this is a discretionary decision. A common scenario where an employee has an unused holiday could help, as you could choose to count this towards their notice period.

For example, an employee may be owed a week’s holiday and has a four week notice period. You can choose to allow them to leave after three weeks and pay them for the fourth week as if it were a holiday. You can, of course, insist they work a full notice and pay them any outstanding holiday balance.

What happens during a dismissal without notice?

In some cases, you may have to dismiss an employee without serving any notice. This is known as a ‘summary dismissal,’ and is an extreme action which should be used only for cases of gross misconduct, and only after thorough investigation.

In any circumstance, dismissing an employee should be a last resort. Performance issues can be tackled through effective appraisals and performance management, and other issues can normally be resolved through disciplinary procedures. If you are having disciplinary issues with employees, the Acas guide to Discipline and grievances at work may help.

If considering dismissal, ensure you exhaust all avenues, and that it really is your last resort. Make sure you conduct and document thorough investigations, and that you remain fair and impartial. Since tribunal fees were abolished there has been a 90% rise in tribunal claims, so it is vital you follow the correct procedure to help avoid litigation. Again if in any doubt, take appropriate legal advice.

What does payment in lieu of notice mean?

If an employee hands in their notice and you do not wish them to work the full period you can ask them to leave straight away and pay them their notice without them having to work. This is only on the basis that this option is in the employment contract, or that both parties agree. This is known as payment in lieu of notice.

If giving payment in lieu of notice, you should account for any holiday entitlement and other benefits

What is garden leave?

When an employee hands in their notice you can ask them to stay away from the workplace, but choose to keep them employed. This means you will pay your employee as normal, and they will also be entitled to their normal benefits. However, they will not be working and will not be able to start work anywhere else.

During gardening leave, you can ask employees to come into work to help handover their role or deal with other matters, as they are still technically employed by you.

What are restrictive covenants?

Further to payment in lieu of notice and garden leave, you can include restrictive covenants in an employment contract that place restrictions on what an employee can do after leaving your business.

Common restrictive covenants include preventing employees from working for competitors, employing any of your current employees, or communicating with customers for a set period after they leave your business.

The aim of restrictive covenants to protect your business by stopping former employees from competing with you using knowledge they have gained whillst working for you.

If an employee breaks a restrictive covenant you may be able to take them to court.

Keep and track records easily

Employing people is a difficult task, without having to worry about keeping track of employment contracts, appraisal reports, performance trackers, etc. Cascade could help to make this easier for your business.

Store all your employee records, notes, and reports securely on our Cloud platform, where they can be accessed 24/7 from a desktop, mobile or tablet. You don’t have to worry about system crashes or backups, as your data is securely backed up automatically.

Cascade offers a full self-service solution, so both you and your employees can access files whenever you need, ensuring that important information is always just the click of a button away.

Contact us to arrange a full demo, and see what Cascade could do for your business.