Notice of Termination of Employment

Notice of Termination of Employment
(Statutory minimum notice)

Key points

• The written statement of employment particulars (often referred to as the 'contract of employment'), given to an employee when he (or she) first starts work with an employer, must include particulars of 'the length of notice which the employee is obliged to give and entitled to receive to determine his contract of employment' (section 1(4)(e), Employment Rights Act 1996).

Notice to be given by the employer

• By section 86(1) of the 1996 Act, a person who has been continuously employed for a period of one month or more is entitled to receive the following minimum notice from his employer to terminate his (or her) contract of employment:
  1. at least one week's notice of termination if he has been continuously employed for less than two calendar years;
  2. at least one week's notice of termination for each complete calendar year of continuous employment, if he has been continuously employed for two years or more but less than 12 years; and
  3. at least 12 weeks' notice of termination if he has been continuously employed for 12 years or more.
     So far as the term 'continuous employment' is concerned, an employee is deemed to be in continuous employment if he (or she) is employed under a contract of employment. This means that every employee (regardless of the number of hours he normally works in a week) is entitled to notice to terminate his employment, as described above, so long as he has been continuously employed for the requisite period. 

Notice to be given by the employee

• Unless his (or her) contract specifies a longer period of notice, an employee who has been continuously employed for one month or more need only give his employer a minimum of one week's notice to terminate his contract of employment. That minimum notice period of one week does not increase with length of service (ibid. section 86(2)).

Summary dismissal

• Any employee, who is summarily dismissed for gross misconduct (which is effectively a repudiation of his (or her) contract of employment), thereby forfeits his entitlement to notice (statutory or contractual). 

Waiver of right to notice

• There is nothing in law to prevent either party to a contract of employment (whether employer or employee) waiving his or her right to notice on any occasion, or from accepting a payment in lieu of notice. For instance, an employer may agree to allow an employee (who has resigned) to quit his job earlier than the date on which the employee's notice expires. However, it is unlikely that he can insist on his doing so. If the employee agrees to leave early, his employer must nonetheless pay him money in lieu of wages or salary for the whole (or the remainder) of the notice period. Likewise, an employee, who has been dismissed, in circumstances which do not warrant summary dismissal, is under no obligation to accept an offer of money in lieu of notice (unless the contract of employment stipulates otherwise) and may insist on working out his notice period. Finally, if an employer 's conduct is such that an employee is entitled to terminate his contract of employment without notice, the employee may do so either with or without notice 

Rights of employee during notice period

• If, during his (or her) period of notice (whether given by the employer or the employee), an employee has normal working hours and during any part of those normal working hours he (or she) is ready and willing to work, but no work is provided for him (or her) to do, or he is incapable of work because of illness or injury, or he is absent from work on approved holidays, parental leave, or wholly or partly because of pregnancy or childbirth, his employer must pay him his normal remuneration during that notice period. However, that right arises if (but only if) the period of notice required to be given by the employer under the terms of the employee's contract of employment is the same as (or not more than one week more generous than) the statutory minimum notice required by section 86(1) (ibid. sections 88 and 89, as amended by Schedule 4, Part III, paragraphs 10 and 11, Employment Relations Act 1999).

  Note

  Any payment already made by the employer to the employee during the relevant part of the notice period (whether by way of sick pay, statutory sick pay, maternity pay, statutory maternity pay, holiday pay, or otherwise) will go towards discharging the employer's liability under sections 88 or 89, and 90, of the 1996 Act.

• For example, an employee with 10 years' continuous service, who is dismissed while absent from work on sick leave, will be entitled to be paid his (or her) normal wages or salary while serving out his notice (so long as the notice to which he is entitled under his contract of employment does not exceed 11 weeks) – even if he has long since exhausted any contractual or statutory entitlement to sick pay. An employee who resigns during a period of sick leave is likewise entitled to be paid a week's pay (in respect of the period of notice prescribed by ibid. section 86(2)) so long as the notice which he is entitled to receive from his employer does not exceed the prescribed statutory minimum by more than one week).
• The same general rules apply to the employee who has no normal working hours under the contract of employment in force during the notice period. Subject to the proviso that the notice required to be given by the employer to terminate the contract must not be more than one week more generous than the statutory minimum period of notice, an employee who resigns or is dismissed must be paid his or her normal remuneration during that statutory notice period. However, the employer's liability to pay in these circumstances is conditional on the employee being ready and willing to do work of a reasonable nature and amount to earn a week's pay (ibid. section 89(1)).

Exceptions to the rule

• However, no payment is due in consequence of a notice to terminate given by an absentee employee if, after the notice is given and before that notice expires, he (or she) takes part in a strike or other industrial action against his employer (ibid. section 91(2)). The same rule applies if the employee breaks the contract by failing to serve out his full notice period. Indeed, where the notice was given by the employee, the employer 's liability to pay does not arise until that notice period expires (ibid. sections 88(3) and 89(3)).
• Nor is there any entitlement to payment in respect of a period during which the employee is absent from work either with his (or her) employer's permission (eg, approved leave of absence without pay) or in consequence of a request for time off work (within the meaning of Part VI of the 1996 Act or sections 168 to 170 of the Trade Union & Labour Relations (Consolidation) Act 1992: time off for trade union duties and activities).
• Likewise, if an employee who has resigned or been dismissed breaks his (or her) contract of employment and is summarily dismissed for gross misconduct while serving out his notice period, his employer may lawfully withhold any amount otherwise payable to the employee in respect of that part of the notice period which falls after the date on which that summary dismissal took place (ibid. section 91(4)).
  
  

Wrongful dismissal

• An employee who is wrongfully dismissed (ie, without benefit of the notice to which he (or she) is entitled under his contract of employment, or in law) may nowadays pursue a claim for damages before an employment tribunal. But, if the amount he is claiming exceeds £25,000, he would be best-advised to pursue his case through the civil courts which have concurrent jurisdiction in these matters.

Note

The jurisdiction of the employment tribunals was extended on 12 July 1994 to include all breach of employment contract disputes which arise or are still unresolved at the end of a period of employment. The relevant statutory orders, saved by section 3 of the Employment Tribunals Act 1996, are the Employment Tribunals Extension of jurisdiction (England & Wales) Order 1994, and the Employment Tribunals Extension of jurisdiction (Scotland) Order 1994.