Notice Periods – a Guide for Employers

You also need to know how much notice you are entitled to receive when an employee resigns.

Why is this important?

Applying the correct notice period is essential in calculating the Effective Date of Termination (EDT). The EDT is the employee’s last day of employment. After the EDT, the employee is no longer entitled to receive their salary or other contractual benefits. Calculating the EDT wrongly could lead to a claim if you end employment too soon.

Notice an employer must give to an employee

If you are ending the employment for reasons other than gross misconduct, you must give at least the minimum period of notice. The statutory notice periods are:

• One weeks’ notice for employees with at least one month but less than two years of continuous service.
• One weeks’ additional notice for each full year of service, up to a maximum of 12 weeks for 12 years or more.

Employment contracts can allow for longer notice periods. In that case, the longer notice period applies. If the contract attempts to allow a shorter notice period, statutory notice will always apply.

Gross misconduct

If an employee has committed an act of gross misconduct, then following a full and fair disciplinary procedure they may be dismissed without notice and will not be paid for their notice period. Caution should be exercised though as attempting to get around notice periods in reliance upon a spurious allegation of gross misconduct is likely to lead to an Unfair Dismissal claim.

Redundancy

Contractual notice or statutory notice, whichever is longer, applies when an employee is dismissed by reason of redundancy. Employees sometimes wish to leave sooner in a redundancy situation but if they refuse to work their full notice period, this is deemed a resignation and the entitlement to a redundancy payment will be lost.

What if the employee resigns?

The statutory notice period for resignations is one week. Contracts of employment usually provide for a much longer notice period, which will take precedence. If an employee fails to work their notice period, this is technically a breach of contract.

Garden leave

Whoever has given notice, if the contract of employment allows it, the employer may choose to place the employee on garden leave. This means that they remain employed until their original EDT, and receive their salary and benefits as usual during that time, but they are not required to work.

Pay in Lieu of Notice (PILON)

Again, as long as there is provision in the contract of employment, an employer might choose to bring the EDT forward and instead pay PILON equivalent to the salary that would have been paid during the notice period.