Notice Period in the UK: Important Facts and Legal Requirements

Notice Period in the UK

It’s often stressful when an employee leaves a business. Employers may be concerned about the knowledge gaps left in their wake, how their departure could affect their colleagues and so-on. Alternatively, sometimes, their departure is a relief.

Regardless of the uncertainty at this time, one thing that will hopefully be more certain about their departure is their notice period. In the UK, notice periods are determined by the government (statutory notice) and by contract (contractual notice). Find out all you need to know about notice period in the UK in this article.

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Statutory Notice Period: How Much Leave Does an Employee Have to Give?

In the UK, the legislation about handing in notice (statutory notice) states that employees must give at least a week’s notice if they have been in their job for more than a month. Whether they have to give verbal or written notice depends on what is written in their contract.

While some sources (nidirect.gov.uk and acas.org.uk) also say that employers must give employees “one week for each complete year (up to a maximum of 12) if employees have been continuously employed for two or more years”, it does not appear that this is written in statute. The confusion may arise because of the statutory redundancy notice period, which is a government requirement. (If in doubt, consult an employment lawyer.)

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The general trend is that more junior employees are required to give one month’s notice and more senior employees are required to give three months’ notice. However, as in the case of most HR-related documents, the contract is king!

How much leave should an employee be required to give?

That’s up to your company and what you put int your contracts. While a month may not seem a lot of time to fill a junior, but important role, most employers are not prepared to wait a long time before someone accepts a role and joins their new company.

So, giving employees a long notice period can be an advantage if you’re likely to take a long time to fill their role – which is usually the case for more senior employees. But it can also be an advantage for them: Reassuring them they will still have an income for a certain period of time if they let go.

In the C-Suite it is common for executives to have a six, or even a nine or 12 month notice period. These terms are usually negotiated, and mutually-acceptable terms are agreed if and when a C-level exec leaves or is asked to leave.

Do Employees Have to be Paid During Their Notice Period?

The simple answer is ‘yes’. According to the gov.uk website, employees are entitled to normal pay during their notice period even if they are off sick, on holiday, on parental leave or available to work even if their employer has nothing for them to do.

What is Payment in Lieu or PILON?

Payment in Lieu of Notice (PILON) can be given to employees when their employment is terminated and it is not desirable for them to carry on working for the company. Employers can pay them a salary or wage instead of whatever their contract says their notice period is. PILON can also be given in redundancy circumstances.

What is Garden or Gardening Leave?

Garden leave or gardening leave is the term used to describe an agreement made between an employee who resigns and their employer, where they mutually agree that the employee will not come back into the office, or may work remotely, and will still be paid until the end of their official notice period. This type of leave is most commonly offered to sales people, particularly if they leave to work for a competitor. The idea is to prevent them from enticing clients away from the company they are leaving.

What Happens if There’s a Dispute About Notice Pay?

The gov.uk website says that the first point of call in a notice pay dispute is the company’s formal grievance procedure. But, if this doesn’t work, employees (or, in this case, ex-employees) can sometimes make a claim to an employment tribunal if they think they have been treated unlawfully. At this stage, the Advisory, Conciliation and Arbitration Service (Acas) gets involved. More information about employment tribunals is available in this downloadable guide.

Most employment contracts have restrictive covenants in their contract – for example, terms that indicate employees can’t work for a competitor or have contact with customers for a period of time after they leave. The gov.uk advice is clear that a company could take their ex-employee to court if they are found to breach these covenants.

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What Should the Format of a Notice or Resignation Letter Be?

On the employee side

Regardless of how long the notice period is, most contracts require employees to provide a termination of employment letter, more commonly known as a resignation letter. The contents of these vary dramatically but they should include the date of letter, employee’s name and signature and the notice period (which must agree with the contract). Some employees choose to provide a reason for resignation. This is not necessary. It’s more important to document their reasons for leaving in follow-up procedures such as exit interviews.

On the employer’s side

The more formal-sounding ‘notice of termination of employment’ is the name typically given to the letter or notice that an employer gives to an employee when they are fired or let go. Be aware: The rules about how and when you can terminate an employee’s contract are very strict in the UK. Again, it’s all about what’s in the contract.

Unless employees are fired for gross misconduct or summary dismissal (when you dismiss someone instantly without notice or pay in lieu of notice, usually because of gross misconduct (for example theft, fraud or violence)), there are strict rules around terminating their contract for redundancy, lack of performance or a company’s inability to pay them (insolvency or bankruptcy).

Whatever you do, be sure to document and retain records of all employee-related leave, benefits and disputes – it’s not just important in case of legal disputes, it’s also a data protection requirement!

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