In the employment contract it specifies the time period for either party to bring the contract to an end. There is also a statutory minimum notice period which can override the contract, and this is discussed further below.
What is the difference between statutory and contractual notice periods?
Contractual notice – the amount of notice the employer/employee can give one another, set out in the employment contract. This notice can be the same as, or longer than the statutory minimum, but not shorter.
Statutory notice – the minimum legal notice that can be given by either party. For employees, the thresholds are different. If employed for one month or more, the minimum notice to be given is at least one week.
For employers, the statutory minimum notice they need to give is:
- Less than two years’ service a minimum of one weeks’ notice.
- Between two and 12 years’ service a minimum of one weeks’ notice for each year of continuous service.
- More than 12 years of continuous service a maximum of 12 weeks’ notice.
Employees who have been employed for less than one month have no statutory right to be given notice.
Is an employee able to give shorter notice to an employer?
The employment contract will state what notice period the employee is required to give if they want to resign, although this can be varied if both parties agree.
What rights does an employer have in how notice periods are operated?
If provided for in the employment contract, an employer can do one of the following:
- Have the employee work their notice (this is the default position).
- Place the employee on garden leave - not required to work and continues to be paid as usual.
- Pay employee in lieu of notice (PILON) – this ends employment straight away. The employee is paid the equivalent of notice period earnings and can take up other employment immediately unless there are restrictive covenants enforced.
These options must be provided for in the contract of employment to be legally available. If not, the employer would be in breach of contract and would no longer be able to enforce any restrictive covenants.
Does an employer need to include notice periods in fixed-term contracts?
Generally, fixed-term contracts will automatically end on the agreed date. However, the employer might want to end the contract earlier; it is essential to have a provision for either party to give notice to terminate the contract. If no notice period is included an employer ending the contract earlier would be in breach of contract and liable for paying the balance of the time the contract had left to run.
What should I do next?
If you are an employer in need of advice or have a specific question on notice periods, please contact Kirsty Henderson, one of our HR Advisors.
First Published 28 January 2021
Last Updated 28 January 2021
28 January 2021
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