Many people will often have more than one job throughout their life. Moving jobs can be a stressful time so it’s important to give your employee time to adjust to this change.
To allow for this change, employers and their staff need to understand their notice periods rights and the distinction between them.
Notice periods should be clearly outlined in your employee’s contracts to avoid any problems. If not, you could face legal action against you, such as employment tribunals and costly fines.
In this guide, we’ll explain what a notice period is, what the legal amount of notice is, and the difference between each type.
What is a Notice Period?
A notice period is the amount of time your employee has to work for you after they resign, are dismissed, or are made redundant.
Their notice period depends on:
- How long they’ve worked for you.
- What it states in their contract.
- If they’ve been dismissed, made redundant, or resigned.
There are two types of notice periods: statutory and contractual.
Contractual Vs Statutory Notice Periods
There are two main types of notice periods that you should keep in mind.
Contractual notice period
Contractual notice is whatever is specified in the employee’s contract. It can’t be less than the legal (or statutory) minimum and should fit with your company’s overall culture.
Statutory notice period
The legal notice period is the minimum amount of notice you can provide to departing staff. The length of the statutory notice period depends on how long an employee has worked for you.
The following notice periods are statutory and legally binding:
- If employed for one month to 2 years: at least one week’s notice.
- If employed for 2 to 12 years: one week’s notice for every year.
- If employed for 12 years or more: 12 weeks’ notice.
Do all employees have notice periods?
There are some situations where you don’t need to provide your staff members with a notice period.
For example, even if a person works under a zero-hour contract, notice periods aren’t legally required but are still entitled to one. A person under a zero-hour contract doesn’t need to give notice if they’ve served less than one month in the business.
You can terminate contracts without notice, and they can leave without warning too.
However, it’s a good business practice to provide a ‘reasonable’ amount of notice when their employment ends.
What Are an Employee’s Rights if Dismissed?
Even if there is no written contract, all employees must be given ‘reasonable’ notice when employment is ended.
But there are a few exceptions. Employees that may not have notice periods include:
- Staff employed for less than a month.
- Crown servants (e.g., police).
- Staff dismissed because of gross misconduct.
Do Employees Have to Work During Their Notice Period?
If your employees sign a contract saying they must work during their notice period, they must adhere to it.
For many businesses, it’s common practice to give a minimum of one week’s notice when resigning.
If an employee doesn’t fulfil their notice period, your business could suffer from production issues. You could take your employee to court because of the damages they’ve inflicted. But this should always be a last resort.
Damages such as loss of profit are not easy to prove. You need to have documents that go into details about profits lost, as well as any costs for hiring cover staff.
Pay in lieu of notice (PILON) is a type of severance pay, which is given instead of working.
You can decide to provide PILON instead of asking employees to work through their notice. But they are still entitled to receive their notice pay as well. With this type of severance pay, the employee’s contract will end straight away.
Redundancy Notice Periods
The length of notice will ultimately depend on service length and contract terms. The rules on redundancy notice periods, payment, and other entitlements should be outlined in employee handbooks and contracts.
If you’ve selected your employee for redundancy, you must give them the statutory minimum for notice periods.
Both voluntary and involuntary redundancy can use this calculation too.
You may choose to use garden leave when employees serve their notice. The employee leaving doesn’t need to come into work, but you still have to pay them for their notice.
This type of leave may be used if they are leaving to join a rival business. This could also mean the leaver could expose sensitive data or affect work operations.
How to Work Out a Notice Period
To determine the length of your employee’s notice period, there are some variables to consider.
There are a few steps to follow, such as:
- Review your employee’s contracts that they signed at the beginning.
- See how long they’ve been working for you.
- Check if they’ve already booked time off.
- Find out why your employee is resigning.
Is a Notice Period Letter Needed?
A notice period letter confirms that an employee has plans to leave their job. Your employee should refer to their contract, as this will state whether it’s needed in writing.
A letter of resignation should include the following:
- The date.
- The name of the person it’s addressed to.
- The title of the role they’re resigning from.
- The last day of employment (this is based on contract and notice period).
- Their full name and signature.
An employee can include details such as a thank you and details of the reason they’re leaving too.
An email that includes the list above may be valid as well. This needs to be stated within the employee’s handbook too.
After the employee has sent their letter or emailed you, you should hold a meeting to discuss the matter.
Get Expert Advice on Notice Periods with BrightHR
As an employer, you should be aware of the difference between statutory and contractual notice periods.
Your employee’s notice period should be clearly outlined to avoid any confusion. If not, they could bring legal action against you without a proper notice period. This can result in employment tribunals and costly fines.
BrightHR can help you manage notice periods with ease. Don’t hesitate to get in touch and speak to one of our experts.
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