Notice Periods for Employees
Did you know that employers who fail to provide the correct contractual notice period to an employee, could be liable for a claim of wrongful dismissal resulting from a breach of contract? Notice periods for employees should be documented in the legally binding employment contract.
Written Statement for Contract Terms & Conditions
Employees have a legal right to a written statement of the main terms of employment (contract) when they commence work with a new employer, which can be issued up to 2 months after their start date. However, please note that from April 2020 this will change – see our employment law update blog. Therefore, it is vital that employers state the correct notice periods in any contracts issued to employees. Consideration will be required for probationary periods where offered, so you will need to ensure that you are clear on the notice period associated with this time span.
Notice Periods for Different Job Roles
As an employer, another point to consider is the varying notice periods you may require for different categories of employees. Some job roles will require a longer training period and it would be prudent to allow a crossover period, where both the employee due to leave and the new employee work together. You may have roles that have a high turnover, so a smaller notice period is likely to be the most suitable in this situation.
For more senior employees, you would usually require a longer notice period, as their roles are most probably based on knowledge, qualifications and industry experience, so it would take longer to recruit for these roles. As an employer, you would probably wish to keep these types of employee, so they don’t work for a competitor. Therefore, a longer notice period would discourage an exit, unless that individual was absolutely certain it was time to leave. A further consideration is protecting the business with a robust and restrictive covenant (that’s a blog for another day).
Employers also need to consider whether they are happy for their senior employees to work within the business during a notice period. It is common for some categories of employees to be placed on “garden leave”, therefore, they are not required to attend work – simply to be available, if required. However, the employer will be required to pay the employee to be at home for the duration of their notice period.
Regardless of the contractual notice period an employer chooses, it must not be less than the statutory minimum amount as referenced under s.86 of the Employment Rights Act 1996. Essentially, the statutory entitlement is one week after a month’s service up to a maximum of 12 weeks, one week per each year of service.
Pay In Lieu Of Notice (PILON)
Further considerations include having a “pay in lieu of notice” (PILON) clause, which allows an employer to dismiss an employee (following a fair procedure) or accept their notice and pay them for their notice period without the employee working the notice period. The employee is entitled to receive payment for any benefits that would have been accrued during the notice period, except for annual leave. Statutory holiday is only calculated up to the date of dismissal and not to the end of the notice period. It is essential to be clear in the contract about the actual date of termination when PILON is implemented, as this affects an employee’s rights. Generally, many employers have the termination date as the date notice of termination has been given.
Make sure your contracts are fit for purpose and protect your business. If you need any additional help or advice, then please call us on 01455 231982 or send an enquiry via our contact page.