What is a notice period? Everything you need to know

Notice periods can often be heavily debated topics, especially for small business owners, as they’re prone to a significant number of variables.

However, with the COVID-19 pandemic creating a need for businesses to cut costs which has subsequently resulted in an increased redundancy rate, you need to be up to scratch.

In this helpful blog, we’ll cover what notice periods are and everything associated with them.

What is a notice period?

A notice period refers to the time an employee or employer must provide to terminate the current employment contract.

The length of this time is typically outlined within the standard contract of employment, and during this period, an employee must be paid as normal.

What is the minimum notice period?

Within the UK, you’ll find two different types of notice period – statutory and contractual.

Firstly, the absolute minimum amount of time you need to provide is the following statutory notice:

• One week’s notice for those who have been employed between one month and two years
• One week’s notice for each year worked by those employed for between two and 12 years
• 12 weeks’ notice for those employed for 12 years or more

However, you have the option to outline a longer contractual notice period in the employment contract.

To do this, you must ensure the terms and conditions you’re setting are clear and concise, otherwise it can be contested and reverted to the statutory minimum.

Factors many businesses consider when creating a contractual notice period are the seniority and skills set of the employee, for example:

• Employees typically have one month
• Managers have up to three months
• Directors can have up to six months

How do notice periods work for fixed-term contracts?

Often, notice periods aren’t considered for fixed-term workers as their start and end date are outlined from the beginning.

But if the employment does need to be terminated from either side, if nothing has been outlined prior, then one week is usually all that’s required.

Do resignations impact notice periods?

With a resignation, an employee must abide by the minimum notice period that is outlined in the contract, and they’ll typically provide their end date in their letter/email.

It’s possible that they can provide a longer period then initial outline, for example, if their contract says four weeks, they may give eight weeks as a gesture of goodwill.

If an employee does opt for an extended notice period, you must honour it, and they cannot be forced to leave earlier than the date they’ve provided.

Can notice periods be reduced?

An employee can ask for their notice period to be reduced, but you’re under no obligation to agree.

Typically, this happens because their new job has asked them to start immediately, but as an employer, you need to consider how difficult it will be to fill their role.

Can employees have time off during their notice period?

Absences can vary during a notice period.

If an employee requests a holiday during this time, you still have the right to deny their requests, but you’ll need to pay out any unused holidays once they leave.

As for sick days, you must allow employees time off if it is due to an illness.

How can IRIS help?

If you’re looking for a simple HR software that can easily manage all the people processes associated with redundancies, look no further.

Our software, IRIS HR Professional, enables you to streamline tasks and ensure compliance, so you can rest assured that everything is correct.

For more information on IRIS HR Professional and to start a trial, click here.