Notice periods: what are they?
Handing in your notice is a simple enough action – as an employer, it's a great way for you to have time to hire a replacement and put everything into order before your team member leaves, but what does UK law actually state when it comes to notice periods?
In this guide, I'll share with you what a notice period is, how to use it, what the law says, and some extra best practices that we use here at Charlie to go with it.
What is a standard notice period in the UK?
According to the UK governement's website, you must give at least one week of notice if you've been in your job for more than a month. These are the official rules so nothing stands in the way, right? Not quite, and we'll see that notice periods are way more complicated than this and can have a lot of legal loopholes.
In reality, a standard notice period in the UK is dependant on a few things:
- What is written in your employment contracts – the mandatory notice period you added to your employment contracts
- How long the employee has been with the company – lenght of service and notice period can vary depending on what's written in the contract
- The reason why a notice is being handed – the notice won't be the same legally if the employee has resigned, has been made redundant or dismissed
How long should a notice period be?
Exactly how long a notice period needs to be is going to depend on a few different factors. There are actually two different types of notice period recognised by UK employment law: statutory notice periods and contractual notice periods.
Statutory notice periods
As an employer in the UK, there is a statutory minimum period of notice that you are obliged to offer. This is the legal minimum amount of notice that you have to offer – you can offer more, but you can never offer less.
Here are the UK's statutory minimum notice periods:
- One week’s notice for any period of continuous employment lasting between one month and two years
- One week of notice for each additional year of continuous employment (between two and 12 years)
- 12 weeks’ notice if employed continuously for 12 years or more
Contractual notice periods
The minimum notice periods set out above are exactly that - the bare legal minimum.
The other kind is contractual notice periods – the notice periods as set out in the employee's contract of employment.
Many companies choose to offer their staff longer minimum periods of notice – largely because having just one week's notice can be really unsettling. It's a very short amount of time and almost certainly not enough to find a new job.
A company that offers only the legal minimum on notice periods shouldn't be surprised if their staff look to move somewhere that offers them a little more stability.
It's worth noting that there's nothing in the law stopping a company from asking their staff to give them a longer period of notice than it is required to give the employee in return, as long as it is clearly set out in their contract of employment (download our UK employment contract template right here for more info).
However, while it might be legal this probably isn't particularly fair way of running a business. It hardly inspires trust between the company and employee – in fact, it sends out a pretty damaging message. Companies should think carefully before going down this route. At Charlie, we wouldn't recommend it if you want to build a fair relationship between you and your team.
How long should a notice period depending on the situation?
There are also different situations such as probation periods, gross misconduct, and redundancy where the terms of notice period are, according to UK law, a bit different. Let's see what they are.
During an employee's probationary period
The length of an employee's notice period will usually be much shorter when an employee is still in their probation period. In cases like this, one week is the standard length of time.
If there is gross misconduct
If you believe an employee is guilty of gross misconduct, then you are entitled to dismiss them without notice.
Only very serious acts – things like theft, violence, or gross negligence in their role – can qualify as examples of gross misconduct.
However, dismissing someone for gross misconduct is not something to be taken lightly and you need to make sure you're on firm ground legally – otherwise, your company could be accused of unfair dismissal. For help with any queries around gross misconduct, get in touch with our HR Advice team.
If you're giving your team member payment in lieu of notice (or pilon)
If your company has decided to terminate a member of staff's employment contract, you are obliged to offer them their contractual or statutory notice period.
However, you could also offer to pay them in lieu of notice (or pilon). This means that you pay them the full sum of wages owed to them over the course of their notice period, but don't expect them to come into work.
What they do instead is up to the employer and employee to decide – perhaps they get on with applying for new jobs elsewhere or perhaps they just stay out of the office until their notice period runs down. This is commonly known as garden leave.
So... How long should I set my employee's contractual notice period?
So, we've spoken about the different factors at play when setting an employee's notice period. But how long is right for you and your small business?
Here at Charlie, we've settled on a one month notice period for full-time, contracted employees.
In most situations, this gives you ample time to hire a replacement, complete the handover and adjust as a team – while still remaining respectful of the employees desire to move on and start their new job. Remember, longer notice periods can make it unnecessarily hard for your team to find new work. Many employers, for example, would struggle to hold a role open for a full three months.
However, there are some situations where you should look at using a slightly longer notice period. Here's some factors you should take into account.
1) Seniority
Employees with the most responsibility will typically have the most to hand-over and the biggest risk attached to a ‘changing of the guard’.
On top of this, losing a team leader or C-suite figure can be jarring for the rest of the team, so the longer there is for people to get used to the idea of the change before it happens, the better.
2) Length of service
Just by virtue of experience, employees who have been working in your company for many years will have acquired knowledge and know-how beyond their role and level of responsibility and will, therefore, have more to handover to the rest of their team/or replacements.
3) Specialisation
Some roles are so vital for your organisation that having too short a notice period risks critical functions going unstaffed. For instance, if you are working in the fin-tech space, then losing your Head of Technology without having enough time to find a suitable replacement is an incredibly dangerous scenario.
What should I do when an employee hands in their notice?
Make the handover process as positive as possible to encourage the departing employee to do it in good spirits.
Here's how we proceed here at Charlie:
- Think about hiring a replacement straight away and get the departing employee’s opinion on what they think you should look for.
- Ensure all the knowledge that was previously just in their head is kept in the company.
- Schedule and then conduct a thorough exit interview.
- Collect all the logins that other employees might not have access to
Common questions when it comes to notice periods
As a CEO, Operations manager, founder or person responsible for HR, notice periods can be difficult to understand, There are many questions you're probably asking yourself – that's why I'm here to help.
As an HR advisor at Charlie, I get customers asking questions like this every day. Below, I combined a few of the most relevant ones, and I hope the answers I provided will help your business as well.
How much notice do I have to give if I'm making an employee redundant? Sarah F. – Operations Manager
If you're making a member of your staff redundant, you'll have to comply with UK legislation on the matter to remain HR compliantwho. That means:
- giving at least one week's notice for an employee who has been with you between one month and 2 years
- giving an extra week's notice for each year when they've been an employee between 2 and 12 years
- a mandatory 12 weeks' notice after 12 years of employment
Should I amend employment contracts after an employee has been with us for a long time? Dimitri D. – Chief of Staff
It's entirely up to you – there's no legislation when it comes to notice period in the UK, as long as the employee gives one week notice if they've been employed for more than a month.
That is, however, something you can counter by adding notice periods in your employment contracts.
Many people choose to increase the notice periods for their team member after they've been employed for several years, just because it may be difficult for them to find a replacement and they'll need time to adjust.
At Charlie, we don't recommend doing this, just because it can have a massive impact on your employee's career and it can create friction between you and your team member.
We stick to our one month notice period regardless of how long team members have been with us for.
If you wish to jump on the trend though, here's an idea of what other businesses do depending on length of service:
- after two years – one week of notice per year
- after twelve years – twelve weeks notice
Can I ask senior management for a longer notice period? Daniel F. – Operations Manager
You can, if you wish to, ask senior management for longer notice periods. The notice periods can vary between two months to six months depending on the kind of role this person occupies at your company.
In which situation can a notice period present with a breach of contract? Alex S. – CEO
If an employee's contract of employment states, for example, that they have a four week notice period, they will need to give their employer four weeks notice before their last day. If they left the business before that date, it would likely constitute a breach of contract.
The same is also true in reverse – an employer can't force a member of staff to leave the business before their minimum notice period is up (unless they choose to pay them in lieu of notice – more on that later). If they did, it would be a breach of contract and they may find themselves at an employment tribunal.
What rights do my team members have during their notice period? Miranda V. – Founder
Employees are entitled to take their annual leave as normal during their notice period, and also entitled to their standard company benefits such as sick leave or sick pay until their employment ends. In that time, they continue to earn their normal pay as usual up until their last day.
Can one of my employees negotiate their notice period? Victor C. – Founder
It all depends on what happened between you, the history, whether you want them to remain at the company for a while.
Of course, you don't want to lock your employees because you resent them for something that's happened between you two. You should always remain professional and make sure you do what's best for your team member.
It also depends as to whether your business can afford losing them before the end of their notice period – are they really essential to the team? If that's the case, think twice.
One of my team member has refused to work during their notice period. What do I do? Angela B. – Operations Manager
That is very unfortunate and can be very tricky to work around. You should always try to negotiate and work around these hurdles before coming to a drastic solution, but if the employee won't comprise and is adamant that they won't work with no room for negotiation, communicate with them that you'll have to deduct this from their final payslip.
What happens if we have a dispute over how much the team member is owed? Callum C. – CEO
If your team member is disputing how much they are owed in regard to their last payslip, you should follow your grievance procedures (that's where it's important to have the right policies and procedures in place).
If this doesn't work and you can't agree on a solution, however, you can also choose to solve any problems through mediation where you and your employer can try to find a solution together before taking it to an employment tribunal.
It's important to note a few things that employees have 3 months to make a claim after their employment ended or the problem happened.
If this sounds a bit too much for one person, there's nothing to worry about. Our HR team is here to help – simply book a call with one of us today.
Employer vs employee: information required
Depending on whether you're the employer or the employee, you'll need to provide information once the notice has been handed. Below, I've just recapped what you should incldue in the letter you must sent via email, post or in person.
What team members need to provide
When a team member hands in their notice, it's pretty simple. They need to:
- The date at which you're handing in your notice
- The company's current addresss
- The full name of the person you're addressing the notice to (your line manager)
- The date where you will last be employed
- Mention the term of notice period from your contract
- A thank you for the opportunity to work at the company
- Sign with your full name and your signature
What the business needs to confirm
Once an employee hands in their resignation, the business can usually reply confirming the following:
- The date at which their employment will be last
- Confirm their rights in regard to holidays, payment, etc
- If they're offering payment in lieu of notice and if they wish to put the employee on garden leave
That's all for today when it comes to notice periods in the UK – I hope this guide was complete and helped you sort out through your own notice periods.
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