Employment contracts can be a minefield. Covering vital information relating to expectations from both the employer and employee’s perspective and all legal aspects of employment on a broad scale.

Notice periods are just one of the elements included in contracts, and once both parties sign and agree to the employment terms and conditions, notice must be given by either party if they then wish to end the employment status.

At this stage, this may seem fairly straightforward; however, there are two very distinct types of notice periods to be aware of: statutory and contractual notice periods.

As an employer, you must give proper notice; if you fail to do this, what is termed a breach of contract will occur, which can result in employment tribunals and hefty fines.

To help, this post looks at the meaning of statutory notice periods and contractual notice periods and the legalities of each.

If you’re thinking about HR outsourcing solutions, employment contracts are one area that Bhayani Law specialises in, ensuring that contracts are watertight and robust – for sound advice you can rely on call us on 0333 888 1360.

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Statutory notice periods

For an employer to terminate a contract of employment, you must give a minimum amount of notice as specified in The Employment Rights Act 1996. This minimum term depends on the length of time an employee has been with the company.

For example, by law, employees must receive:

One week’s notice if they have worked for over a month but less than two years.

One week’s notice for every year an employee has worked over two years but less than 12.

Twelve weeks’ notice for employees who have worked 12 years or more.

Statutory notice period employee:

If an employee wishes to resign, the statutory notice period for employees is at least one week. This notice period can remain the same no matter how long the employee has worked for the company under statutory notice periods.

However, employers do expect a reasonable amount of notice, and as such, employers can request additional notice periods, which leads us to…

Contractual notice periods

A contract of employment can stipulate notice period timeframes beyond the statutory requirement, and from an employer’s perspective, this area should be considered carefully.

The important point to note is that timeframes under contractual notice periods can be longer but not shorter than statutory notices, as the statutory minimum will automatically override the contract terms.

However, most employment contracts will request longer notice periods because most companies will need more than a week to find a replacement employee, for outstanding work to be completed, and for a full handover to be carried out.

Notice period contract: It’s important to note that unless stated in your agreement, an employee can receive notice on any day, with notice periods starting the following day.

Pay during notice periods

Pay during contractual notice periods is determined by the terms of the contract. However, as an employer, you are legally required to pay normal notice pay for statutory notice periods.

Suppose the contractual notice period is longer than the statutory notice required. In this case, normal notice pay will not apply; instead, compensation is based on the average an employee earned over the 12 weeks before their notice period began.

Pay in lieu of notice is possible but will depend on circumstances and what is included in the employment contract.

Employment law notice periods also state that during any notice period, an employee will still accrue their statutory holidays, and the employee has the right to be paid for these if they remain untaken.

When does a notice period for work not apply?

Notice periods can be reduced when it is believed that an employee continuing to work there until the end of their notice will cause damage to the business, the employer and employee relationship has completely broken down, or the employee could potentially access sensitive data and information.

Contracts can also end early if the employment contract contains a payment in lieu notice.

You will also not require a notice period if an employee has committed an act of gross misconduct. In these circumstances, the employer can dismiss the employee instantly due to a significant breach in the contract deeming the terms of the contract redundant, so no notice period is required.

However, an employer must be 100% certain of their grounds for firing an employee to avoid claims of unfair dismissal against them.

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Providing the right notice period to your employees is vital. Failure to give the correct notice period can result in tribunals, fines, and more.

Both the employee and the employer have a duty to provide notice of their intention to leave the organisation.

All notice periods must be written into employment contracts and signed by both parties, ideally before work commences.

Employee notice periods – 1-week minimum, doesn’t apply to casual workers, independent contractors, freelancers, etc.

Outsourced HR companies

To help you with the minefield of employment contracts, outsourcing your HR services to professionals like Bhayani Law can relieve the stress of handling and understanding statutory and contractual notice periods.

Qualified, professional, and experts in the field of HR services, Bhayani Law is here for you.

Call us today at 0333 888 1360 or email us at [email protected].