Ask Us – Contractual notice periods
I have a question about contractual notice periods. In a contract of employment, does notice from employee to employer need to be the same as notice from employer to employee?
There are two types of notice periods; Statutory Notice and Contractual Notice
Statutory Notice
Employer to employee
- Service of >1 month but <2 years: 1 week’s notice
- >two years service: 1 week’s notice for each full year served up to a maximum of 12 weeks.
Employee to employer
- Service of >1 month: 1 week’s notice. This does not increase with service.
Contractual Notice
An employer has freedom to specify longer notice periods so long employees are notified and agree the terms in their contracts of employment. This is really useful for key people in a business where a longer handover period may be needed or where it may be difficult to appoint to the role.
If contractual notice is less than the statutory entitlement, the statutory notice will apply.
For example: A contract states employer to employee notice is 1 month.
- An employee with 4 years service is dismissed; they are entitled to 1 month’s contractual notice
- An employee with 5 years service is dismissed; they are entitled to 5 weeks statutory notice.
Most employers require employees to give the same notice as they are entitled to receive but an employer may stipulate different values if they wish.
If it is very different, the employee may not however be willing to accept it and as an employer you may scare off your ideal candidate. Most employees will have an expectation that it will be balanced unless there’s a good reason not to.
An imbalance may impact the psychological contract (ie willingness for give and take). There’s also the wider perception of the organisation’s reputation as an employer – how ethical is it to only give 1 week’s notice but expect 1 month in return?
In practice we tend advise employers to either keep in line with statutory notice or match employer and employee notice.
