Notice Periods Frequently Asked Questions

What is the minimum statutory notice period?

Statutory notice is the minimum legal notice that can be given.

Under section 86(1) ERA 1996, the employer must give the following minimum notice:

• One month but less than two years’ = not less than one week’s notice.
• One month but more than two years’ (but less than twelve years) = not less than one week’s notice for each year of continuous employment.
• Twelve years or more = not less than twelve weeks’ notice.

Under section 86(2) ERA 1996, the notice required by an employee (employed continuously for one month) is not less than one week.

The contract of employment may require additional notice periods.

Can an employer require an employee to use up outstanding holiday entitlement during their notice period?

Yes – as long as sufficient notice is given in advance.

Under regulation 15(2). Working Time Regulations 1998 (SI 1998/1833) an employer may nominate dates on which an employee must take some or all of their statutory annual leave entitlement (5.6 week’s statutory minimum), provided that the employer gives the required advance notice.

The notice is a minimum of twice as many days’ as the number of days’ holiday (reg. 15(4)(a)) that the employer wishes the employee to take. For example, for one weeks nominated annual leave, two weeks’ advance notice should be given.

These provisions may be varied of excluded by a relevant workforce agreement.

If the employer’s contractual provision allows the employee more than the statutory minimum entitlement, then it will depend on the contract terms or any contractual policy in force.

Do employment rights change once an employee gives notice of termination?

No. Unless the employment contract provides otherwise, an employee’s rights during the notice period will be the same as it they were not under notice.

Is a sick employee entitled to pay during their notice period?

If an employee is absent due to sickness and gives notice to resign, they may have:

• The right to Statutory Sick Pay (subject to the normal qualifying criteria)
• The right to contractual sick pay (if they have not already exhausted their entitlements).

What if contractual notice is less than statutory notice?

Employers are free to provide contractual notice terms that are more generous than the statutory minimum. However, the statutory minimum notice would replace any shorter notice period provided in the contract.

For example; a four-weeks contractual notice period would apply for employees until they accrue five years’ service at which point the statutory minimum entitlement will apply.

What is the notice pay entitlement for sick employees?

Where the employee’s contract of employment only requires the minimum statutory minimum notice period, and the employee is unable to attend work because of sickness or injury, the employee is entitled to receive full pay for their notice period (Section 87, ERA 1996). This will be the case, even if they have exhausted their right to statutory or contractual sick pay.

Any sums paid to the employee by way of sick pay (statutory or otherwise) will count towards their entitlement to full pay.

Full pay is at the rate of a week’s pay for each week of the notice as per sections 221 to 229 ERA 1996, with no upper limit.

However, if the contract of employment provides a contractual notice period that is at least one week more than their statutory minimum notice period (section 87(4), ERA 1996), then the employee is not entitled to full pay, regardless of who gave notice.

For example:

Case study A

• A is on long term sick leave.
• SSP and contractual sick pay has been exhausted.
• A is to be dismissed.
• A’s contract provides for notice of 1 calendar month (up to 5 years’ service, whereupon statutory notice is payable).
• A has four years’ service.
• The contractual notice is less than a week more than statutory notice.

A will receive full pay for the statutory notice period (the first four weeks after notice is given), despite having exhausted sick pay entitlement. For remaining few days of notice, the contractual rights will apply and therefore will not be entitled to any pay.

Case study B

• B is on long term sick leave.
• SSP and contractual sick pay have been exhausted.
• B is about to be given notice of dismissal.
• B’s contact provides for three months’ notice
• B has 8 years’ service.
• The contractual notice is more than one week over the statutory notice entitlement (8 weeks’)
• Sections 87 to 91 ERA 1996, do not apply and the notice period is governed by the contract provisions.

B will not receive pay during the notice period.

Case study C

• C is on sick leave and in receipt of SSP.
• There is no contractual sick pay entitlement.
• C gives notice of resignation.
• C remains sick for the duration of the notice period.
• C’s contract provides for the employer to give four weeks’ notice.
• C has 4 years’ service.
• Contractual notice is equal to statutory notice entitlement.

C will receive full pay for one week (the statutory notice period employee must give under s86(2) of his four-weeks’ notice period).

What if the employee is absent for another reason?

The rules (set out above for notice entitlement for sick employees) also apply to employees absent due to pregnancy, maternity leave, paternity leave, adoption leave, shared parental leave, parental leave or annual leave or where the employee is ready and willing to work but no work is provided by the employer.

Ask another question

Do you have another question relating to notice periods that hasn’t been covered in our guide? Feel free to ask Richard Nelson LLP’s employment solicitors and we’ll endeavour to get back in touch with you as soon as possible.

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