Unless a temporary contract has naturally ended, or someone is being dismissed for gross misconduct, employees should work out, and be paid for, a notice period before their employment ends.
How long does a notice period need to be?
This depends on how long the person has worked for their employer:
1. 1 month–2 years: They should receive 1 week’s notice in total
2. 2+ years: They should receive 1 week’s notice (up to 12 weeks) for every continuous year worked
If the employee has resigned, rather than being dismissed, by law, they should give 1 week’s notice, if they have been employed for over 1 month.
In addition to the statutory notice periods mentioned above, employers are also able to use reasonable contractual notice periods to lengthen the notice period for staff. These periods should be proportionate to the employee’s role.
There isn’t a set amount of notice required for employees who resign having been employed for less than 1 month, but even here, reasonable notice should be given by the employee, if possible.
Notice in writing
Notice from the employer or employee should ideally be given in writing (email is fine as long as it is clear and contains sufficient detail). The written notice should reference the date that the employment will (or is suggested to) end.
Does an employee need to be paid their normal wage during their notice period?
Yes. The employee should receive their normal wages for any time worked during their notice period. And the same goes for their benefits, which also continue to be paid until they leave the company. If you have a clause in your contract allowing you to do so, you may even pay the employee without them actually working their notice (known as ‘payment in lieu of notice’ – or PILON).
With payment in lieu of notice, the employee would be free to start a new job immediately – an alternative to this is for them to work their notice away from the office on full pay (known as gardening leave).
How does annual leave fit in with notice periods?
It remains unaffected
Annual leave continues to be available to be taken and to accrue, even during the notice period.
If an employee still has holiday to use, they can apply to take it during their notice period, if they give their employer sufficient notice. Take a look at our guide to working time for more information on leave entitlements.
Equally, as the employer, you can instruct your outgoing employee to take their leftover annual leave during their notice period, provided:
1. you give the employee advanced notice of the day you propose them to start the holiday, and
2. the length of notice that you give them is at least double the number of days available for the employee to take.
So, for example, if an employee has 5 days of annual leave left to take. You must give them 10 working days’ notice of the date on which you require the holiday to start.
If the employee has already taken more or less annual leave than they’ve accrued, the employer can deduct or add on the necessary amount from their final pay.
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