Notice and notice pay

Either party has a right to end an employment contract at any time, with notice (unless the contract is for a fixed term and does not give the employer any ‘early termination’ rights).

 

Notice can be given orally or in writing. The first day of the notice period is the workday following the day the notice was given.

 

What notice must an employee give?

Unless the contract requires them to give longer, employees must give at least one week’s notice of their resignation.

 

What notice must an employer give?

Notice is determined according to the terms of the contract but cannot be less than the statutory minimum. A payment in lieu of notice can be given if the contract is terminated with immediate effect instead of at the end of the notice period.

 

More information on payments in lieu of notice

 

The minimum amount of statutory notice that must be given is set out in section 86 of the Employment Rights Act 1996.

 

Length of Service                              Minimum Notice

Less than 1 month                                No notice

After 1 month                                        1 week

After 2 years’ service                            2 weeks

For each extra year of service              1 additional week’s notice up to

Over 12 years’ service                          12 weeks

 

The statutory minimum period of notice therefore has a ceiling of 12 weeks. To determine an employee’s notice entitlement ask:

  • What does the contract state?
  • Is this equivalent to or greater than the s86 notice required?
  • If not then apply s86 minimum notice.

 

A court or employment tribunal can decide that there is an implied term in a contract that an employee is entitled to ‘reasonable notice’, which may in some rare circumstances be more notice than the statutory minimum. Many employment contracts give more than the statutory minimum.

 

When an employee is entitled to statutory notice, s/he must be paid her/his normal weekly wage during the notice period.

 

This is the case even if the employee is unable to work, for example because s/he is off sick, on maternity leave, or laid off (ss87 and 88 of the Employment Rights Act 1996) but note that if the notice entitlement in the contract is at least one week more than the employee’s statutory entitlement would be, the employee might not be entitled to a normal week’s pay for each week of the notice period.

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Zero increases by 26%

The Office for National Statistics has released new figures that show nearly 700,000 people work on zero hours contracts - up 26% from last year.  The problems caused by these contracts will require a significant change in the law.

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