Notice periods can be tricky for employers, they often come with different rules that apply based on length of service and the reasons for terminating employment. And as a business owner, if you have had an employee resign you will likely be concerned with other matters such as finding a replacement, figuring out a handover or if there are contentious issues, worrying about potential breaches of confidentiality or post termination restrictions during the notice period. If you have a leaver, you might be asking yourself - What is in the contract? Does the employee have to work it? Can I ask them to stay away from the business during the notice period? The same applies if you have dismissed an employee. Our blog covers these scenarios, so don’t panic!
When an employee leaves a job they usually have to work a notice period. A notice period is the amount of time an employee has to work for their employer after they resign, are dismissed or made redundant.
How much notice they get depends on:
· How long they have worked for their employer
· What's in their employment contract
· Whether they have been dismissed, made redundant or have resigned
In the cases of dismissal including redundancy, an employee must get at least the statutory notice period if they have worked for you for at least one month. If they have worked for you for:
· 1 month to 2 years – statutory notice is 1 week
· 2 to 12 years – statutory notice is 1 week for each full year they have worked
· 12 years or more – statutory notice is 12 weeks
The employees’ contract might state a different amount of notice. This is called ‘contractual’ notice.
There are exceptions to the rules on notice period and pay. These include:
· Gross misconduct – If an employee is found to have done something serious enough to justify you dismissing them for gross misconduct, the employee would not be entitled to statutory notice or any pay in lieu of notice.
· An agreement between employer and employee - The employer and employee can agree to reduce the notice period, if it works for both of them. For example, an employee might prefer to give up some of their notice period and pay, so they can start a new job earlier somewhere else. If an employer and employee have an agreement like this, it should be put into writing.
If an employee leaves their job without working or providing the correct amount of notice, they are likely to be in breach of their terms and conditions of employment. In that case, you would only be liable to pay them up until the last day that they worked and they would not be entitled to further pay for their unworked notice.
There are two scenarios that involve an employee not working their notice period. These include:
1. Payment in lieu of notice (PILON)
A clause within the employment contract might allow for payment instead of working notice, this would mean they stop working straight away. The payment will be based on their full salary for the period of notice. The contract will end straight away, so it's unlikely they'll have to provide other contractual benefits, but it’s crucial to check the terms details in the employment contract.
2. Garden leave
Garden leave (or gardening leave) is when an employer advises the employee that they do not need to work either part or all of their notice period. This could be because the employer does not want the employee to have access to sensitive or confidential information, that they could use in a new job.
The employee must get paid as usual during their notice period, including for all contractual benefits. The employee is still employed throughout the period of garden leave, even though they're not working.
The experts at ForrestHR can provide guidance and support if you have queries regarding notice periods/pay, including our complimentary review of your existing contracts, to determine any gaps that might leave you in a difficult situation when it comes to leavers.