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How Statutory Notice Periods Work

Under the Employment Rights Act 1996 (section 86), both employers and employees have minimum notice obligations when ending an employment relationship. These statutory minimums cannot be reduced by a contract of employment, though they can be exceeded.

Employer giving notice (dismissal or redundancy): after one month of continuous service, the employer must give at least one week's notice. Once the employee has completed two years of service, the minimum increases to one week per complete year, up to a maximum of 12 weeks at 12 or more years of service.

Employee giving notice (resignation): after one month of continuous service, the employee must give at least one week's notice. This remains one week regardless of how long the employee has worked for the employer. There is no statutory escalation for employees as there is for employers.

If an employee has less than one month's continuous service, neither party is required to give any statutory notice. However, any contractual notice period agreed in the employment contract will still apply from day one.

Contractual vs Statutory Notice

Many employment contracts specify a notice period that is longer than the statutory minimum. This is entirely lawful and very common, particularly for senior or specialist roles. The key principle is straightforward: whichever notice period is longer takes precedence. An employment contract cannot reduce the statutory minimum, but it can exceed it.

Common contractual notice periods include: one week during a probationary period, one to three months after probation for most roles, and three to six months for senior management, directors, or key personnel. Some executive contracts specify 12 months or more.

If the employment contract is silent on notice, the statutory minimums under section 86 of the Employment Rights Act 1996 apply automatically. In some cases, a tribunal may also imply a "reasonable" notice period based on the seniority of the role, industry custom, and the employee's length of service.

It is worth reviewing employment contracts regularly. An employee who joined with a one-month contractual notice period may, after several years of service, find that their statutory entitlement (one week per year) actually exceeds their contractual notice. In that situation, the statutory notice applies.

Garden Leave and Payment in Lieu of Notice (PILON)

Garden leave is an arrangement where the employee remains employed during their notice period but does not attend the workplace or carry out any duties. The employee continues to receive their full pay and benefits, and their contract remains in force. This means they are still bound by their contractual obligations, including restrictive covenants and confidentiality clauses. Employers generally need a specific garden leave clause in the employment contract to enforce this arrangement.

Payment in lieu of notice (PILON) is where the employer pays the employee for their notice period and terminates the employment immediately, rather than requiring the employee to work out their notice. If there is a contractual PILON clause, the payment is treated as earnings and is fully subject to income tax and National Insurance. Without a contractual clause, a PILON may be treated as damages for breach of contract, which can be tax-free up to the first £30,000 (though HMRC guidance in this area has tightened since the 2018 tax reforms).

After receiving a PILON, the employee is free to start new employment immediately. However, be aware that the treatment of restrictive covenants differs: on garden leave, restrictions typically run from the end of employment, while with PILON the employment ends on the date of termination, which may affect how long post-termination restrictions apply.

Notice During Probation

There is no separate statutory framework for probationary periods in UK employment law. Probation is a contractual arrangement, not a legal status, and the same statutory notice rules apply to employees from their first day of employment.

Employment contracts commonly specify a shorter notice period during probation, such as one week. This is perfectly valid, provided it meets the statutory minimum. Since the statutory minimum is one week after one month of service, a one-week contractual notice period during a typical three or six-month probationary period will normally satisfy both contractual and statutory requirements.

Employers should be cautious about specifying zero notice during probation. While this is technically permissible during the first month of employment (when there is no statutory entitlement), it becomes unenforceable once the employee passes the one-month mark. After one month, the statutory minimum of one week applies regardless of what the contract says about probation.

Related Resources

• Notice Periods Explained
• How to Dismiss an Employee Fairly
• Settlement Agreements Guide
• Redundancy Support