Statutory Notice Period

The statutory notice period protects both the employer and the employee when employment comes to an end. The notice period gives the employer notice that the employee will be leaving so that the employer has time to look for someone else to take over the role at the end of the notice period.

While each company can negotiate on an individual basis, the minimum requirement is set by the UK law.

The law covers a variety of situations where a member of staff might cease employment for a company. Also, the length of the notice period increases the longer an employee has worked there. Statutory minimum for employee to employer notice is a week when an employee has worked for at least 1 month.

But company can set higher contractual notice periods. In this article, we will look at the statutory notice period UK law requirements. We will also discuss how they apply to probation, dismissal and redundancy.

If you are dealing with difficulties around any of these,  call one of our experienced and friendly advisors today, on 01455 858 132.

What is the statutory notice period in the UK?

Under the Employment Rights Act 1996, it’s the least amount of notice required before terminating a contract of employment. It refers to the statutory notice period given to the employee by their employer, and the other way around.

The ETA 1996 states that you need to give a statutory notice period for termination of employment, as follows:

• No notice required if the employee has worked for you for less than a month
• One week’s notice given if the employee has worked for you for more than a month, but less than two years
• Two weeks’ notice given if the employee has worked for you for more than two years

The notice period increases by a week for every year of service after the first two, up to 12 week maximum for 12 years’ or more service. This system aims to recognise long service, but also to protect your business interests. To replace a long-standing employee who decided they need a change in their professional life might prove a lengthy and tricky process. You will still rely on their support to make the adaptations needed to either train somebody else, internally, or employ a new person.

While the above describes the minimum requirement, each business leader decides what works best for their company. In certain industries, with a historically high turnover, a short notice period might benefit both sides. However, it could also be a contributing factor to reduced levels of staff retention. Notice is a term of the contract so if an employer wants to change a contractual term they will need to seek agreement from the employee.  Next, we will demonstrate why you might want to do so.

We will also cover the exceptions to the rule, as well as how to apply the statutory notice period for dismissal and redundancy.

Decide what notice period serves you best  

Depending on skill levels and how long it takes to train a new employee into the business, ensure you do not leave yourself open to unnecessary risks. It might sound like a good idea to offer only the minimum required by law. However, you might find yourself in the unpleasant situation that an employee leaves because they lack job security.

It is usually in your business’ interest to have a longer notice period so that you can make arrangements for someone else to pick up the work after the notice period and for a handover to take place.

When discussing terms of employment with a new employee, give them the minimum notice your business will need to replace them. This needs to be reasonable, the more senior the position the more likely a longer notice period will be needed.

We have seen employers make another mistake. Some companies request for longer notice periods from workers than they are willing to offer. Unless you have a very legitimate reason to do so, we advise you to avoid this practice.

This also applies to statutory notice periods during probation.

Talk to one of our colleagues specialised in contracts & documentation before you decide how much notice to give through contractual terms.

Exceptions to the statutory minimum notice period

In rare cases, such as summary dismissal or pay in lieu of notice, you do not need to give the statutory minimum notice period. However with pay in lieu, they should still get paid for it.

As an employer, you can decide to summarily dismiss one of your employees for gross misconduct. This means serious breach of contract or behaviours that compromise health and safety, or the day-to-day business operations, like theft. Please note, you still have to follow a fair procedure e.g. investigation and disciplinary.

We advise you to weigh all the necessary aspects before you decide to go the summary dismissal route. If the employee can prove, for example, that a colleague has been treated more leniently in a similar situation, you risk a discrimination claim.

Also, unless you are dismissing them for gross misconduct, you need to still give them the minimum statutory notice (or more depending on what the contract says).

When might you want to offer pay in lieu of notice?

While this might apply to a variety of situations, one of the most common ones is when dealing with a workplace conflict. Instead of asking them to keep working while disgruntled, you can decide that you don’t actually need them in. In this case there needs to be the contractual right to pay in lieu otherwise it risks a breach of contract claim.

What is the statutory notice period for redundancy?

As an employer, resorting to redundancy or summary dismissal is never a first option. However, you might find yourself in the situation when it proves the only option available.

Statutory redundancy pay is also payable to employees with 2 or more years’ service and there may be contractual redundancy pay schemes in place (it will depend upon what is in the contract). More importantly, ensure that you follow the due process to avoid unfair dismissal claims. Remember that you have to use a different procedure in case of dismissal for poor performance, summary dismissal and redundancy.

Missing legally required steps in each of these cases will likely result in a high risk of a tribunal claim. Don’t risk it, call one of our highly experienced advisors on…

We will walk you through each step necessary for you to follow.

What is garden leave?

Garden leave in the UK is where you tell an employee not to come into the office during their notice period. But they remain an employee, so are still entitled to the regular pay and benefits they’d normally receive and are still bound by their regular employee obligations. There needs to be the contractual right to place an employee on garden leave.

The employee can’t perform any work activities while on garden leave unless you call them back into the office.

This means, because the employee has to keep themselves available for any work that comes in, they cannot go to work for their new employer during this period.

Also, contractual clauses, such as the non-competition clause, binds the employee to the employer until their notice period is complete. Usually, restrictive covenants like non-competition clauses are in place for a certain period of time after employment ends, dependant on the clauses in place.

Many employees (and employers) ask the question ‘Is garden leave a bad thing?’ The short answer is no.

You don’t lose any rights or entitlements while on leave, it is mostly a tool for the employer to better manage the company information during the transitional period between an employee leaving, and a new employee starting.

Gardening leave helps protect your data by restricting employee access to computers, files and systems. 

How does garden leave work?

The right to place an employee on garden leave is a contractual one, meaning you should include a garden leave clause when drafting an employee contract.

In the clause, you can include details such as who they can communicate with regarding leave, what they should expect regarding attendance at the office, and so on.

This clause is particularly important, as placing an employee on leave without it constitutes a breach of contract. And the employee could claim breach of contract.

Gardening leave and employee rights

An employee has all the same rights they would have if they were working their notice.

When an employee hands in their notice, and you wish to place them on gardening leave, you will need to clearly set this out in a garden leave letter.

Alternatively, you can include a statement relating to garden leave in a letter responding to an employee’s resignation.

All you need to include is a statement declaring when the period begins and when it finishes.

Garden leave and redundancy

You can put an employee you’re making redundant on garden leave. You can do this from the time their notice period starts up until they leave the business.

But the same rules apply—the employee may not begin new employment until the garden leave period is over.

Garden leave and holiday pay

You can request an employee take their remaining holiday entitlement during garden leave. If this is the case, the employer requesting the employee to take annual leave, it is the employer that would need to give the employee notice of this (double the amount of notice to the amount of time they want them to take as annual leave e.g. 2 days annual leave, the employer would need to give 4 days’ notice)

Also, take into account any holiday accrued by the employee during their notice period, as they will continue to accrue holiday during this time.

What is PILON?

(PILON) Payment in lieu of notice is a term that refers to a payment made to an employee instead of a notice period. There are significant differences between a PILON and Garden Leave.

What is the difference between PILON and garden leave?

With PILON the employee doesn’t work their notice period but they are paid as if they had. There needs to be a contractual right to pay in lieu otherwise there is a risk of a breach of contract claim.

An employee who receives a PILON payment does not work their notice period and is free to go straight into other employment.

An employee on garden leave is technically still employed. So, they can claim the same rights and pay, even though they may not be present.

For further insight into PILONs, there are some resources available by getting in touch with Croner.

Expert Support

If you require further information on this subject, contact a Croner expert on 01455 858 132.