Issue the correct periods of notice
This guide tells you about the required notice periods that an employer or employee must give, whatever the reason for the employee leaving. The notice period will be determined either by law or by the terms of the contract with your employee, but it can be varied in some circumstances.
This guide covers contractual and statutory notice periods, how the notice can be varied, pay during the notice period and what happens if either party withdraws notice. It also covers notice periods for employees on maternity, paternity, adoption, shared parental or parental leave.
Contractual and statutory notice periods
An employee who has worked for a company continuously for one month or more must receive notice of dismissal/redundancy.
An employee who has worked for a company continuously for one month or more must give notice of their intention to leave.
These notice periods must be included in a written statement of employment particulars which must be issued to your employee within two months of them starting work.
Read Labour Relations Agency (LRA) guidance on preparing a written statement of main terms and conditions of employment.
Employer notice periods
The minimum legal notice period to be given by an employer is:
- one week's notice if the employee has been employed by the employer continuously for one month or more, but for less than two years
- two weeks' notice if the employee has been employed by the employer continuously for two years, and one additional week's notice for each further complete year of continuous employment, up to a maximum of 12 weeks
An employer can include longer periods of notice in the employment contract.
Note that if you plan to make 20 or more employees redundant special conditions apply. See redundancy: the options.
Employee notice periods
The minimum statutory notice period which must be given by an employee is at least one week's notice if employed continuously for one month or more by that employer. This minimum is unaffected by longer service.
Minimum notice does not apply to casual workers, independent contractors or freelance agents - see employment status.
Unless a contract states otherwise, notice can be given on any day. The notice period runs from the start of the day after the day on which notice was given. So if a week's notice is given on a Monday, the period of notice will begin on the Tuesday and expire at the end of the following Monday.
Some contracts of employment contain special terms about notice, eg in contracts of employees who have access to information that you wish to protect from a competitor. See when workers leave your employment.
Notice periods on family-related leave
An employee intending to take maternity or paternity leave must give notice before the end of the 15th week before the expected date of birth and state the expected week of childbirth and the date of the start of the leave. An employee taking paternity leave should also state how much leave is being taken.
An employee taking shared parental leave must give their employer eight week's notice (before the leave starts) of their intention to take shared parental leave.
For adoption leave employees must notify the employer within seven days of being notified that they have been matched for adoption, the date the child is expected and the date the leave is to start.
Unless there is a collective agreement in force with a different period then employees must give 21 days' notice to the employer to take any period of parental leave.
Returning to work
Employees returning from maternity or adoption leave don't have to give any notice if returning at the end of their entitled leave. The employer is responsible for telling the employee when leave expires.
If an employee wants to return early, eight weeks' notice must be given to the employer. If not, the employer can postpone the return until the full eight weeks' notice has been given or until the date when the maternity/adoption leave would have ended, whichever is earlier. However, the employer may not postpone an employee's return to a date later than the end of the maternity/adoption leave period.
If the employee does not want to return to work at the end of a period of leave, they must give their normal contracted period of notice. An employee is not required to say in advance whether she intends to return after maternity or adoption leave.
A dismissal on grounds of, or connected with, maternity, paternity, adoption, shared parental or parental leave will be regarded by an industrial tribunal as automatically unfair and risks amounting to unlawful sex discrimination.
It is not unlawful to dismiss an employee on maternity, paternity, adoption, shared parental or parental leave providing it is not for reasons connected with the leave.
If there is a redundancy situation while an employee is off on maternity, adoption or shared parental leave, the employee is entitled to be offered a suitable alternative vacancy where there is one, before it is offered to any other employees. It would be unlawful to make an employee redundant without first complying with this requirement. The employee is entitled to the statutory notice period, or her contractual notice period, whichever is longer, or payment in lieu of notice (if the contract provides for it or, in the absence of any contractual provision, the employee is willing to accept pay in lieu of notice).
Varying the notice period
The statutory or contractual notice period can be varied in a number of circumstances.
This occurs where an employee is dismissed without notice - summary dismissal - for gross misconduct. However, subject to statutory procedures, unless there is a proper investigation and an appeal hearing, an industrial tribunal/arbitrator might find that the dismissal was unfair.
Breach of contract
The employee can also terminate the contract of employment without notice if the employer has fundamentally breached the contract by their conduct.
Right to waiver
Employers and employees can both waive their right to notice, ie the employer and employee can agree to a shorter notice period. This must be by mutual agreement; and neither an employer nor employee can opt out of the minimum legal periods when forming a contract of employment.
Pay in lieu of notice
This will be a breach of contract unless the contract expressly provides for it or the employee is willing to accept pay in lieu of notice.
Minimum notice periods
The employment contract can be varied by agreement between the parties, but the statutory minimum notice periods will still apply.
An employee who has been given notice of dismissal can give counter-notice to leave on an earlier date than the one on which the employer's notice period ends. The minimum statutory notice that an employee must give is one week, but usually their contractual notice period will be longer than this. For the purposes of unfair dismissal legislation, the employee will still be treated as having been dismissed.
If an employee who has been given a redundancy notice wants to leave before their notice expires, eg to start a new job, they can ask the employer to agree an earlier termination date. If the employer agrees, they will still get their redundancy payment.
However, if the employer objects they may withdraw the original redundancy notice and refuse to give the employee a redundancy payment. The employee could apply to an industrial tribunal which will decide whether the employee should get all, part of, or none of the redundancy payment.
Notice periods: minimum payment rights
An employee who continues to work during the period of notice is entitled to receive normal pay and benefits - including pay rises - for that period in line with their employment contract.
Employees with specified normal working hours
Employees whose contract specifies normal working hours and whose employment is terminated on notice are entitled to receive a minimum hourly rate for any normal working hours during the notice period that they are:
- ready and willing to work, but no work is provided
- unable to work due to sickness or injury
- absent from work wholly or partly because of pregnancy, childbirth or paternity, adoption, shared parental or parental leave
- on holiday in accordance with the terms of employment
Employees without specified normal working hours
Employees whose contract does not specify normal working hours are entitled to receive at least a week's pay during the notice period for each week that they are:
- ready and willing to do work of a nature and amount to earn a week's pay
- unable to work due to sickness or injury
- absent from work wholly or partly due to pregnancy, childbirth or paternity, adoption, shared parental or parental leave
- on holiday in accordance with the terms of employment
These minimum payment rights apply whether it is the employer or the employee who gives notice. If the employee gives notice, the employer can delay making the payments until the employee leaves at the end of the notice period - and does not have to make the payments at all if the employee goes on strike during the notice period.
The minimum average hourly rate of pay is a week's pay divided by the number of normal weekly hours. There are legal rules for calculating a week's pay for this purpose. To find out how to calculate pay, see our guide on pay - an overview of obligations.
Contractual notice period
Where the employee is not working during the notice period the employee will lose the statutory right to full pay during the notice period where the contract requires the employer to give at least one week more than the minimum statutory notice. The employee in such a case will be paid in accordance with the contract of employment, which may be SSP or full pay or half pay or whatever other contractual rights apply during lay-off, sickness etc. It is important to seek legal advice before withholding notice pay from employees on family related leave.
Notice periods: payment in lieu and compromise agreements
An employee may simply work out a period of notice. They can also take payment in lieu, or have a compromise agreement with their employer.
Payment in lieu
Employers who don't need employees to work out all or part of the notice period can make a payment in lieu of notice, if the contract allows for it or the employee is willing to accept it. This should cover all the benefits the employee would otherwise have enjoyed during the notice period, including pay, bonuses, accrued holiday etc.
It is important to take legal advice when deciding whether or not to include a payment in lieu provision in the contract, as its inclusion can have a knock on effect on your ability to enforce restrictive covenants against the employee. Restrictive covenants are designed to prevent employees from disclosing or using confidential information, trade secrets, etc, and/or soliciting or dealing with customers during a specified period after leaving the business. Restrictive covenant law is challenging and it is recommended that you take legal advice prior to drawing any up. There are also important tax provisions.
Compromise and conciliated agreements
A compromise agreement is a single agreement setting out the financial and all other terms on which the employment relationship will end. The compromise agreement must meet certain requirements to be viewed as legally binding including; being in writing, signed by both parties and the employee must have had the benefit of independent legal advice. The employee is then unable subsequently to make a claim in the courts or an industrial tribunal.
A conciliated agreement is a legally binding agreement, facilitated through the Conciliation Service of the Labour Relations Agency, between an employer and employee to settle an existing or potential claim to the Industrial or Fair Employment Tribunal. As with a compromise agreement, the employee agrees to 'settle-out-of-court' by accepting the financial or other compensation that the employer is offering in return for signing away their right to pursue their claim. This service is provided free of charge by the Agency.
Compromise or conciliated agreements can be useful in circumstances where the employer wishes to avoid the publicity, costs or uncertain outcome of a tribunal or court case.
Once an employer or employee gives notice, it cannot be withdrawn unless both parties agree.
Thus if an employer gives notice to an employee and later changes their mind, the employee can still consider themselves as dismissed as from the date of termination specified by the notice.