What is a notice period in employment?
A notice period is the period or length of notice that an employee must give to their employer, or an employer must give to their employee, notifying the other of the termination of the employment relationship. So, for example, if an employee’s notice period is four weeks and they intend for their last day of work to be 18 December, they would have to give notice of termination four weeks in advance of this, on 20 November.
How does an employee know what their notice period is?
Usually, an employee’s notice period is specified in their employment agreement. If an employment agreement is silent on notice, ‘reasonable’ notice must be given. Reasonableness will depend on the individual employee and employer, such as the industry, the employee’s tenure and their role – for example, a permanent, and more senior employee (e.g. a CEO) would be expected to give more notice than a part-time entry-level employee.
Can an employer reject a resignation?
No! Resignation by an employee is a unilateral act, and it does not involve the employer’s agreement. An employer cannot decline to accept a resignation and require the employee to continue to work for them.
That is even the case where an employee resigns with immediate effect in breach of the employment agreement. An employer cannot claim that the employment remains on foot and the resignation is of no effect.
What if an employee does not give their employer the correct notice?
In the event an employee does not give their employer the correct period of notice, the employer could:
- Accept the shorter notice and agree that employment comes to an end on an earlier date
- Claim for damages or penalties for breach of the employment agreement
- Enforce any applicable and enforceable liquidated damages clause – noting that such clauses have generally been held to be unenforceable
How does notice work under a trial period?
Often trial periods will have specific notice periods that are shorter than the general termination notice period. This is for the obvious reason that trial periods are 90 days and under a trial period an employer does not need to give a reason for the termination, so a longer notice period could be awkward.
Remember, for a trial period to be effective, an employer must give the employee notice of termination before the end of the trial period. It is okay if the notice period extends beyond the trial period (for example, the trial period notice period is one week, and notice of termination is given on the 87th day), so long as notice was given during the trial period.
Can an employer pay its employee their notice period in lieu of them working it out?
Payment in lieu of notice is where an employer pays an employee a sum equivalent to their notice in lieu (instead) of them working it out. An employee could be paid in lieu for part, or all, of their notice period. Whether an employer has the ability to do so will depend on the existence and wording of a clause to this effect in the employment agreement. Some clauses may require the employee’s agreement, while some might allow for the employer to elect to pay notice in lieu of the employee working it out, on a unilateral basis.
Even where the contractual ability exists, some caution needs to be exercised when paying in lieu of notice. Depending on the provision, payment in lieu of notice may not be just base pay. In some situations, for example where an employer provides a vehicle, paying in lieu of notice could give rise to a disadvantage claim.
Garden leave during notice periods – what does this mean?
Garden leave means the employee remains employed, but they are not required to attend work and/or perform some (or all) of their usual duties. Like payment in lieu of notice, an employer may be able to unilaterally require an employee to go on garden leave for part, or all, of their notice period, or they may need the employee’s agreement to this. The viability of garden leave will depend on the wording in the employment agreement.
Practical tips during the notice period
- Employers and employees: still owe one another duties of good faith
- Employers and employees: summary dismissal (termination without notice) is still a possibility during the notice period
- Employers: should remind employees of any property that needs to be returned before their last day, and any post-employment obligations they need to abide by
- Employees: should review their employment agreement for any post-employment obligations that apply after the end of employment
If you have any questions, please get in touch with our Employment Team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
