Notice Periods UK: Employer's Guide

Notice periods protect both employers and employees during employment transitions. Understanding the rules helps you manage departures smoothly and legally.

Statutory Minimum Notice

From Employer to Employee

Length of Service	Minimum Notice
Less than 1 month	None required
1 month to 2 years	1 week
2 to 12 years	1 week per year
12+ years	12 weeks (maximum)

Example: Employee with 7 years' service = 7 weeks' statutory notice.

From Employee to Employer

Length of Service	Minimum Notice
Less than 1 month	None required
1 month or more	1 week

Key point: Statutory minimum from employee is always just 1 week (after the first month), regardless of service length.

Contractual Notice

Can You Require More Than Statutory?

Yes. Contracts commonly require:

• 1 month notice (most common for standard roles)
• 3 months notice (senior/specialist roles)
• 6 months notice (very senior executives)

The contractual notice must be at least the statutory minimum. If contractual notice is less, statutory applies.

What the Contract Should Say

Clear notice provisions include:

• Notice period during probation (often 1 week)
• Notice period after probation (e.g., 1 month)
• Whether notice can be given during sick leave
• Payment in lieu provisions
• Garden leave provisions

Payment in Lieu of Notice (PILON)

What Is PILON?

Paying the employee instead of having them work their notice period. Employment ends immediately.

Contractual PILON Clause

If the contract includes a PILON clause, you can:

• End employment immediately
• Pay the notice period as a lump sum
• This is not a breach of contract

Without a PILON Clause

Paying in lieu without a clause means:

• You're technically breaching the contract
• Employee receives the money anyway
• Rarely causes problems (employee usually happy)
• But could affect restrictive covenants

Tax on PILON

• Contractual PILON: Taxable as earnings
• Non-contractual PILON: Complex - may be partly tax-free
• Take advice on significant sums

Garden Leave

What Is Garden Leave?

The employee:

• Remains employed during notice period
• Doesn't attend work
• Doesn't perform duties
• Receives full pay and benefits
• Remains bound by employment terms

When to Use Garden Leave

Common situations:

• Protecting sensitive information
• Preventing client contact before departure
• Competitor concern
• Allowing for handover without workplace access

Garden Leave Clause

For garden leave to be enforceable, include a clause like:

"The Company may, at its discretion, require you to take garden leave during your notice period. During garden leave you will remain an employee, receive full pay and benefits, but will not be required to attend work or perform duties."

Without a Clause

You may still be able to impose garden leave, but:

• Employee could argue breach of implied term to provide work
• More defensible if you continue full pay/benefits
• Take advice if challenged

Garden Leave vs PILON

Garden Leave	PILON
Employment continues	Employment ends immediately
Full pay and benefits	Lump sum payment
Restrictive covenants continue	Covenants may start running
Employee remains bound by contract	Employment terms end

Working Notice

What Happens During Notice

Normal employment continues:

• Same duties (unless varied)
• Same pay and benefits
• Holiday continues to accrue
• Can take holiday (with approval)
• Normal disciplinary rules apply

Can You Change Duties During Notice?

Generally, you can assign reasonable alternative duties. Consider:

• Does contract allow flexibility?
• Is change reasonable?
• Are you reducing responsibility/status significantly?

Significant demotions during notice may breach contract.

Holiday During Notice

Accrual Continues

Holiday accrues throughout the notice period.

Taking Holiday During Notice

Employee requests holiday: You can approve or refuse as normal.

Requiring employee to take holiday: You can require it with proper notice (twice the leave length).

Paying Out Holiday

On termination, pay for:

• Accrued but untaken holiday
• Include notice period accrual

Sickness During Notice

Employee Goes Sick

Notice still runs while sick. You pay:

• SSP (if eligible), or
• Contractual sick pay (if applicable)

You cannot extend notice because of sickness (unless contract says otherwise).

Already on Long-Term Sick

You can give notice to someone on sick leave. The notice period runs as normal.

Resignation Issues

Short Notice Resignation

If employee gives less notice than required:

• You can insist on full notice (but hard to enforce)
• You can accept the shorter notice
• You can deduct from final pay (if contract allows)
• Rarely worth pursuing legally

Withdrawing Resignation

Employee changes their mind:

• You're not obliged to accept withdrawal
• Once you've accepted resignation, it stands
• Be clear in your acceptance

Constructive Dismissal Risk

If your actions cause the resignation:

• Employee may claim constructive dismissal
• Notice period still technically applies
• But employee usually leaves immediately
• Claim is for the breach, not the notice

Gross Misconduct

Summary Dismissal

For gross misconduct, you can dismiss immediately without notice (summary dismissal).

Requirements:

• Genuine gross misconduct
• Proper investigation
• Fair procedure followed
• Reasonable belief in guilt

Getting It Wrong

If dismissal wasn't justified:

• Wrongful dismissal claim
• Employee can claim notice pay
• Plus potentially unfair dismissal compensation

Wrongful Dismissal

What Is It?

Dismissing without giving proper notice (or pay in lieu) when no gross misconduct occurred.

Claims

Employee can claim:

• Notice pay they should have received
• Benefits they would have received during notice
• No cap on compensation
• Different from unfair dismissal (which has caps)

Common Issues

Employee Refuses to Work Notice

Options:

• Accept the early leaving
• Remind them of contractual obligation
• Reserve right to claim damages (rarely worth it)
• Deduct from final pay if contract allows

Confidential Information

During notice:

• Employee still owes confidentiality duties
• Can restrict access to sensitive systems
• Garden leave may be appropriate
• Remind them of ongoing obligations

Counter-Offers

Employee resigns, you make counter-offer:

• If they accept, resignation is withdrawn
• Get new terms in writing
• Consider if they'll leave anyway (many do)

Performance During Notice

If performance drops:

• Normal management applies
• Can still discipline for misconduct
• Gross misconduct = no notice required
• Document issues

Notice Period Checklist

When Giving Notice

1. Calculate correct notice period (longer of statutory/contractual)
2. Put in writing
3. State termination date clearly
4. Decide: working notice, garden leave, or PILON
5. Plan handover
6. Arrange exit interview
7. Calculate final pay including holiday

When Receiving Notice

1. Acknowledge in writing
2. Confirm leaving date
3. Decide if counter-offer appropriate
4. Plan handover
5. Consider garden leave if needed
6. Remind of post-employment obligations
7. Arrange return of property