Notice periods: what are the rules and how can things go wrong?

What is statutory minimum notice from employer to employee?

Statutory minimum notice is the minimum notice employers need to give employees when terminating their contracts:- Staff with less than a month’s service: no notice
– Staff with 1 month to 2 years’ service: 1 week’s notice
– Staff with over 2 years’ service: 1 week per year of service up to a maximum of 12 weeks

How much notice do employees need to give employers?
Employees need to give employers at least a week’s notice after one month of service.
However contractual notice overrides statutory notice so always check your contracts to ensure you are not in breach. 

When can I pay in lieu of notice (PILON)?

You can only pay in lieu of notice where there is an express term in your contract of employment allowing you to do so. This means you can end the contract immediately and pay the employee the equivalent of their notice pay in a lump sum. The clause should state whether notice pay includes benefits or not.
If no PILON clause exists in the contract you will need to pay notice pay in addition to contractual benefits for the notice period, in order to avoid the risk of a breach of contract claim.

What is ‘Garden leave’?
A Garden leave clause within a contract allows an employer to ensure that the employee remains away from the workplace during their notice period and if carefully worded, can mean that the employer does not need to provide the employee with work during this period. They can also prevent access to confidential information during this time. However the employee must still be paid during their notice period and receive contractual benefits, as if they were at work. This is particularly useful where an employee is moving to a competitor. 

When can I dismiss an employee without notice?

Employees can only be dismissed without notice in cases of gross misconduct. An employer needs to demonstrate they have investigated allegations of gross misconduct and then followed a fair disciplinary procedure. This should involve putting the allegations in writing to the employee and inviting them to a disciplinary meeting at which they have the right to be accompanied. If their explanation for the alleged gross misconduct is not satisfactory and trust and confidence in them a an employee is lost, an employer can dismiss without notice. However the employer should be given the right to appeal the decision. 

What if the employee is off sick during their notice period? Do I have to pay them?

If the employee is only entitled to statutory minimum notice they should receive full pay during their notice period, regardless of which party has given notice. However if the contract of employment allows for notice which is more than one week longer than statutory notice, contractual sick pay terms will apply (SSP or enhanced sick pay).

Do I have to give notice to end a fixed-term contract (FTC)?

Fixed term contracts should end on the contract end date. However if either party wish to terminate the FTC early, notice should be given according to the contract, in writing, ahead of the termination date.

What happens if an employer does not pay the correct notice pay?

This can lead to a claim for wrongful dismissal or unlawful deductions from wages. Wrongful dismissal (Breach of contract) claims in an Employment Tribunal are subject to a limit of £25,000. Unlawful deduction of wages claims are unlimited.

Review of Contracts of Employment and advice regarding notice periods

If you would like us to review your Contracts of Employment or clauses regarding termination of employment please get in touch via help@yourhrpartner.co.uk

Categorised in: Employment law

This post was written by SKHR