A three-month notice period is becoming increasingly common practice, especially for those in highly skilled or senior roles, where the company would benefit from having an adequate time period to find a replacement and get them up to speed before an employee departs. But a notice period can sometime be shorter or longer than this.
UK employment contracts can include any reasonable clause, so long as both parties (employer and employee) agrees to it. That means, you can ask your employees to sign a three months notice period before they can leave, and if both parties agree, then both employer and employee will be responsible for upholding this agreement. If you agree to a shorter notice period for your employees after they’ve signed the original agreement, then this replaces the previous agreed notice period. Any change is at your discretion.
If you want a further extended notice period, then this is at the employees discretion. If you have signed a contract with a three month notice period with your employees, here’s what you need to know:
- It is your employee’s legal obligation to honour the three month period they’ve agreed to.
- You can enforce your contract by law if an employee gives less than three month’s notice without a new agreement.
- Your employee can exit this contract early only if you consent to this. Any employee leaving without giving the proper notice without permission will be in breach of contract.
- You should try to remain on good terms throughout the three months notice.
- All of your employee’s normal pay and benefits must continue during their notice.
- The three months notice begins the day after you’ve been told about an employee’s departure.
Starting a new job should be an exciting time for your soon-to-be former employee, but they can’t get swept up in the excitement and forget their obligation to you. It’s important that employees and employers alike pay special attention to reasonable notice periods in an employment contract.
Whether they’re working a three months notice because of the contract they signed or due to the statutory notice period (if they’ve worked at the company for 12 years or more, three months is standard practice), it’s important to know what’s next for both parties.
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What Do Employees Need To Know?
When an employee provides notice to you of their intention to leave the business it can be a stressful time, but to make things easier, we’ll provide answers to a few key questions today which you can share with your employees to make the process smoother for both parties:
Do Employees Have To Work The Whole Notice Period?
Yes. There are a range of shortened and extended notice periods in all different kinds of employment contracts across the UK; and it doesn’t matter if it’s one week’s notice, one month’s notice, or three month’s notice – if an employee has signed it, they have to do it. Longer notice periods may be negotiated, but only if the employer is keen to help.
An employer may feel it’s in the interests of both parties to reduce the three months notice to a shorter option. This is up to them, though, and if they decide the employee has to work the three months agreed to at the start of the employment, then there’s little else an employee can do. As an employer, it’s your job to be as reasonable as possible, whilst still recognising the needs of your business.
Can Annual Leave Be Used During a Notice Period?
You should also check where a contract stands on annual leave during a notice period. If an employee has some time leftover, it might be allowed to take it during this time so they won’t have to work the full three months, but the likelihood is an employee still wouldn’t be able to begin new employment during this time whilst still under contract. Check contracts for garden leave, too.
What Is The Minimum Notice That An Employee Must Give To Their Employer?
In a contract of employment, then there will usually be a clause relating to notice periods and how long it is. This is the minimum requirement. So, a three month notice period means an employee has to work for three more months before they can take up new employment.
If notice periods aren’t covered in a contract, then the statutory notice periods are related to the length of service for the company and are as follows:
- 1 month – 2 years: 1 week’s notice
- 2 – 12 years: 1 week’s notice for every full year worked
- 12 years+: 3 month’s notice
Employees should always give your notice in writing and ensure the date of notice is clear should later issues arise.
Whilst there is no law in the UK that exists that can physically force employees into the workplace to complete your period of notice, the employment contract itself is legally binding. It is the employees legal requirement to complete the required notice period.
When an employee fails to do so, the employer can take that employee to court to try and have one of two things resolved.
Calm Resolution
The first, is that the judge may impress upon the employee the seriousness of their breach of contract and ask that they return to complete their notice. If the employee refuses or has already started their new job, then the second option will be sought.
Financial Resolution
The second option is that the judge will assess the damages caused by the employee to the employer and issue a fine that awards the cost of those damages to the employer.
What Is The Likelihood Of Court Action?
For those who hold a senior position, then it’s much more likely that employers will commence legal action as they’ll likely lose business as a result of the employee leaving their position early. When employers are dealing with employees in less senior roles, the cost of a court battle is usually higher than the damages that would be awarded, so often no legal action will be taken. Business owners will need to make their own mind up about whether taking action is worthwhile.
Employees shouldn’t, however, rely on the employer not seeking legal action regardless of their position, as they are well within their right to do so if the employee fail to work the period of notice you originally agreed to.
Staying On Good Terms Is Important
For those leaving a position at a business, it’s almost always a good idea to remain on good terms with the employer – and them with you.
As such, both parties should be reasonable during this time to prevent the situation becoming sour. It’s possible both might have dealings with each other in the future as paths cross once more – everyone’s comfort is important here.
What About Those Who Want To Leave Earlier Than Their Notice Period
For those who have tried to make it work but just feel working their full notice isn’t right for the (there may be extraneous circumstances here making them feel this way, such as a toxic work environment or other HR issues), then they should first speak to their employer.
Discussion Is Key
The employee should start by discussing why it is they feel they can’t complete the full three month notice period. They should stay calm and professional as they make a request, and follow it up in writing. If the employer agrees that remaining for the full three months isn’t practical, then they may agree to shortening the notice period. Employers and employees should remember to be reasonable with their requests here.
Employees should be realistic with their options. It’s unlikely they’ll find their three month notice period suddenly changing to a two weeks notice. The employee should support the employer as best they can with finding and training a replacement to an appropriate level, though, and this may result in them being released from the notice agreement much sooner.
Does An Employee Receive Full Pay During My Notice Period?
Absolutely, just as an employee is bound by a contract of employment, if an employee continues working during this period, so too is the employer, meaning the employee is entitled to all of the same benefits as before handing in their notice. This includes full pay, plus benefits like private health insurance, holiday or maternity pay, sick pay, and pension payments.
What Is PILON?
Occasionally, if an employer decides to do so, an employee may be paid in lieu of notice (PILON). Here, the employment comes to an end immediately, but the employee is paid for the full three month notice period without having to work it.
If this is an option, there should be a clause in the contract again – employees should check this to see where they stand with any benefits they may have been entitled to had they continued working for the entire notice as it’s possible they may actually miss out on some of other benefits.
When Does The Notice Period Start?
It’s common practice for a notice period to start one day after notice has been handed to an employer. Handing in a three month notice on Monday 15th April, for example, would mean the notice period begins on Tuesday 16th April, and your final day of employment would be on Tuesday 9th July (12 weeks later).
Can An Employee Take A Holiday During A Notice Period?
So long as your employer agrees to it, an employee can use any outstanding annual leave during their notice period. Unless there is a valid business reason for refusing annual leave, then the employer can’t refuse a holiday request just because someone is working their notice.
In cases where there is a clause in an employment contract that states no annual leave can be taken during a notice period, or where requests to take remaining annual leave are refused, then the employer must pay the full annual leave entitlement with your last pay package.
Related Frequently Asked Questions
Will Employees Still Get A Reference If They Leave Early?
It’s a common misconception in the UK that an employer has to provide a reference. They don’t, unless it says in the contract that they will. Most will do so willingly if the employee been a wonderful servant for the company.
Failure to complete your notice period could cost the employee. The employer may be less willing to provide a reference if the employee has left them in a difficult position by breaching their contract and jumping ship early.
If a positive reference is important to the employee’s future job prospects, then we’d certainly recommend them remaining at their job until your notice period is complete. This is not only good practice with your current employer, but it shows a future employer that the employee has integrity and is willing to stick to their employment contract terms, even when it doesn’t suit them.
However, if the employee already lined up their new employment and they’re happy for their new employee to breach contract with the old employer, then they may choose to do so. It isn’t recommended, but it may work out, especially if the new job is in a new industry with zero chance of you having to deal with old employers again.
Should Employees Tell Interviewers About A Three Month Notice Period?
Honesty is key in business, and making a good first impression counts. Potential employees should always tell a future employer upfront that they have a three month notice period clause in their contract that they intend to honour. This means they can keep their word with your old employer, and keep the new employer in the loop from the start.
Most companies will be more than happy to wait for an employee to be available if they’re the right fit for them.
3 Month Notice Period Summary
Three months notice is much more common in the UK now than most people realise – especially for senior roles, those who have been in a role for 12+ years, and individuals working in industries with specialised or niche skills will all be used to this notice period.
It’s always better for employees to work their full notice period and keep an employer on side during this time. Both parties will never know when their paths may cross again, so it pay to do right by each other.
