A client asked me recently what the ideal notice period is. In truth, that is a question to which there is no one ‘right’ answer. Most businesses have varying notice periods based on the job role, industry type and level within the organisation.
Finding the right notice period for your business needs to be a considered choice which you should review as your business grows:
Your Legal Requirement
If an employee has been with you continuously from one month up to 2 years - the minimum statutory notice period is one week. This goes up to two weeks' notice if the employee has been employed continuously for two years. After that, with every additional year of continuous employment they are entitled to an additional week's notice up to a maximum of 12 weeks. In return, employees must give you a minimum of one week's notice once they have worked for one month and this minimum notice is unaffected by length of service.
However You Can Enhance The Statutory Minimum In Your Contracts Of Employment
When you have a specific notice in place, above the statutory minimum, it’s typical to expect employees who have resigned to work their full notice period, otherwise why would you enhance it?! But getting the balance right when it comes to notice periods is not always straight forward.
My advice? Start at the top - and go from there:
Consider Your More Senior/‘Specialist’ Roles First
In these cases you need to balance what is right for the employee and what is reasonable for your business when considering how long it will take you to find somebody else, for them to join the business and complete a thorough handover. In these situations, you would typically have an enhanced notice period of 1-3 months. Potential employees looking for a senior role may expect to see a lengthier notice period as part of their terms and conditions but don’t be tempted to negotiate. Putting a longer notice period in place when you know you will need an individual to leave swiftly if things go awry (for example if they have a client facing role) could see you having to continue to pay an employee who is on Garden Leave and potentially delivering you nothing. That said, more senior individuals or those where there is a limited number of roles in their given area of expertise may look for longer notice periods as part of their job security.
For other roles that are ‘easier’ to source or where there isn’t a skills shortage you are likely to still want to enhance notice period from the statutory minimum to 1 month (or 4 weeks) to allow you enough time to source a replacement.
But What Happens If You Are Faced With The Dreaded Scenario Of Parting Company With An Employee On Less Than Good Terms?
There are definitely steps you can take in situations when there is animosity and/or you need an employee to exit the business sooner rather than later.
1. Payment In Lieu
As an alternative to an employee working their notice you can pay them in lieu of notice but, you should include a clause in your employment contracts to state that you retain the right to do this. It’s important to remember that payment in lieu of notice (or PILON as it’s more typically known) is different to putting an employee on garden leave, in this situation you continue to pay the employee up until the end of their notice period but you don’t require them to be on site, with PILON you pay them their notice in advance and cease their employment prior to the end of their contractual notice period.
2. Including Holiday Entitlement In Their Notice Period
Another way to reduce an employee’s notice period if you would like them to exit early (they will have to be in agreement) is to offset it against any outstanding leave. For example, if they have 2 weeks’ holiday outstanding and they have a 4 week notice period they can work for 2 weeks and then be holiday of the remaining 2 days.
You will of course always come across those individuals who resign, agree to work their notice and then go AWOL – yes it does happen and I have seen it countless times - unfortunately in these circumstances there isn’t a lot that you can do (unless you want to endure a lengthy and costly legal fight)
Whatever you decide to do make sure you put it in writing (especially if you reach a mutual agreement with an employee where they want to leave before the end of their contractual notice period, for example to start a new job, and you agree to this) whatever the situation.
Lastly, Can You Ever Reject A Resignation?!
Just to clarify to those managers who really don’t want to lose an employee……. no – you can’t refuse to accept a resignation if its given! An employee can choose to resign at any time and you should have a process in place which allows you to have open dialogue to allow you to understand what has brought them to this point. Knowledge is power after all and if there are any underlying reasons why an employee is exiting they are normally only too happy to voice this to you before they exit the business. That said, don’t take everything to heart, employees tend to leave businesses either feeling nostalgic about their time and taking a glass half full approach or taking a glass half empty approach…..take feedback seriously but be pragmatic about what you can change and what you can’t.
Get in touch via email@example.com or call 0203 627 7048 for more support and advice on contractual notice periods.
TheHRhub: on demand and online HR support for startups and SMEs