Are you drawing up a new employment contract, or preparing to say goodbye to a member of staff? Then you need to know how much notice the employee should work before you let them go.
In most cases, typical employee notice periods work just fine. But in others, you’ll need to think more carefully about your organisation’s needs and obligations — and those of the departing employee. Here’s what you need to know.
Typical notice periods are 1 month or 1 week
Employee notice periods are determined by the contract of employment and the law.
Organisations typically ask employees who have been in their jobs for more than two years to work one month’s notice, via the employment contract. A notice period of a month gives you a reasonable amount of breathing space to recruit a replacement employee.
For employees who have been with you less than two years, a notice period of one week is common.
The law on notice periods
Under the Employment Rights Act 1996, both the employer and the employee are legally entitled to a minimum period of notice when the employee leaves. Your contracts should be compliant with these laws.
The minimum notice period is:
- One week for employees who have been with your organisation for more than a month, but less than two years
- Two weeks for employees who have been with your organisation over two years
Notice periods then increase by one week for each year worked, up to a maximum of 12 weeks. These rules don’t apply to retiring employees older than retirement age.
Terminating an employee without giving the contractual or legally-required notice period could lead to a wrongful dismissal claim.
Agreeing payment in lieu of notice
There might be cases where you and the employee agree it would be better for the employee to leave straight away, without working the notice period.
The Employment Rights Act 1996 does not prevent you and the employee waiving your right to notice. However, in such cases, you will still need to pay the employee for the duration of their notice period.
What if the termination is related to conduct?
In some cases — for example, when an employee has been found guilty of a serious crime or gross misconduct — you may wish to terminate employment immediately.
The Employment Rights Act 1996 does not affect your right — or the employee’s right — to terminate the contract for reasons related to the other party’s conduct.
When should you put an employee on garden leave?
When an employee leaves to work with a competitor, they might have a conflict of interests — so you might not want them in your workplace during their notice period. For example, you might not want a salesperson who now works for a rival company talking to your customers.
A typical solution is to put the employee on garden leave. Employees on garden leave stay on your payroll for their notice period, but are asked to stay away from the workplace.
You can include rules in your employment contract about garden leave for employees joining competitors.