Notice periods – Top 10 questions

News on 14 March 2018

During the course of running your business there will be times where employees will leave. When it comes to an employee giving their notice it can raise a lot of questions. Our Top 10 questions should help you when dealing with an employee who is leaving.

You should also send your employee a letter to confirm their end date with the company. Why not download our free resignation confirmation letter template?  

1. Contractual Notice or Statutory Notice?

There may be times where the notice period set out in the contract is different to the statutory notice. When you’re in this situation which one is the right one?

If the contractual notice is less than the statutory, you should use the statutory notice.


2. What is Statutory Notice?

This will depend on how long someone has been working with you. The table below gives a handy guide.

Length of Service Notice Required
Under 1 month Nil
1 month but less than 2 years 1 week
2 years or more 1 week for each completed year of service (to a maximum of 12 weeks)

For example, if an employee has worked with you for 6 years and 2 months, their notice period would be 6 weeks.


3. Is an employee bound by their notice period?

Yes, the statutory minimum is one week’s notice for employees who have been in employment for at least one month.

The statutory notice employees must give does not increase with length of service, but the employee is also bound by notice stated in the contract of employment, which can be more than one week.


4. Can I pay them in lieu of their notice?

There may be times where you don’t want the employee to work their notice. As long as the contract of employment says that you can make a payment in lieu of notice, then you can end their employment before their notice expires and pay them in lieu of it.

If there is nothing in your contract of employment, you should steer away from doing this as you could get a claim for breach of contract.


5. There’s nothing in the contract about pay in lieu. What can I do?

If you don’t want the employee to work their notice, but your contract of employment doesn’t say you can pay them in lieu, there may be another option - Garden Leave. You can use this, if the contract of employment allows it.

Garden leave is where the employee is still bound by the terms and conditions of their contract, but they don’t come in to work.

Your final option could be to agree with the employee an earlier leaving date, with a compensation payment. If they agree to accept a payment in lieu of notice and an early end to their employment, then there is no breach of contract.


6. Does annual leave still accrue during the notice period?

The short answer is yes. Employees will continue to accrue holidays throughout their notice period.


7. Can the employee take annual leave during their notice?

Yes, as long as they have annual leave accrued and they give you reasonable notice. You can refuse this request if you have a valid business reason.


8. Can I make an employee use their annual leave during their notice?

Yes, you can, but you need to give them notice that is double the number of days leave you wish them to take. If they have 5 days accrued and you want them to use this in their notice period, then you would need to give then 10 days’ notice.


9. My employee has taken too much annual leave. What can I do?

Check the contract of employment. If there is a clause in there that say you can make deductions to their wages for things like taking too many days holiday before they leave, then you can deduct this from their last pay.

Be warned; don’t make any deductions from the employees pay unless the contract of employment says you can.


10. I’m dismissing my employee without notice for misconduct. Is there anything I should watch out for?

Employees can challenge a decision to dismiss them without notice. They could put in a tribunal claim for wrongful dismissal. Unlike unfair dismissal, they do not need to have 2 years’ service to be able to put in this type of claim.

If you are looking to dismiss an employee without notice for misconduct, then you need to double check that this decision is water tight.


Need help? If you need any help with notice periods, or just want to talk it through with an Advisor, get in touch! 03300 414 636