Myth-busting: an employee’s entitlement to notice is based on how often they are paid

Myth-busting: an employee’s entitlement to notice is based on how often they are paid

Employment laws generate a lot comment. Hardly a day goes by without the media reporting scare stories about the employment rights of UK employees, which are depicted as being anti competitive, unduly restrictive and in many cases overly generous.

Each month, we are exposing some of the most common employment law myths and explaining the reality behind them. We are not pretending that employment law is easy – it isn’t, but generally it should not be difficult to get the basics right.

So far we have tackled the following myths:

1. In order to dismiss an employee, you must follow a particular procedure and if you do so, you can safely dismiss.
2. It’s not possible to retire employees anymore.
3. You can’t make a woman on maternity leave redundant.
4. Parents have the right to work part time.
5. An employer has to accept an employee’s resignation before it will take effect.
6. Employers must provide exiting staff with a reference.
7. Employers do not need to do pre-employment immigration checks on British or EU recruits.
8. You can vary an employment contract by giving notice.

If you missed these, click on the links for the answers.

This month we look at how much notice an employer has to give an employee to terminate their employment.

Myth

An employee’s entitlement to notice is based on how often they are paid.

Busted

Once an employee has worked for you for one month or more, you must give him the amount of notice set out in his contract of employment to terminate his employment unless this is less than the minimum notice periods set out in law, or the employee has committed an act of gross misconduct and is not entitled to notice.  

It is irrelevant whether the employee is paid weekly, monthly, fortnightly etc.

The minimum amount of notice you must give to your employee is one week for each year of continuous employment, subject to a maximum of twelve weeks’ notice. For example, an employee who began work on 29 March 2006 is entitled to receive at least eight weeks’ notice and an employee who began work on 2 January 1980 is entitled to receive at least twelve weeks’ notice.

Difficulties can arise where the contract does not include an express clause setting out the notice required to terminate the contract. The Court or Tribunal will not simply imply that the period of notice should be the statutory minimum, but will investigate what the parties intended, and will determine what is reasonable in the circumstances.  

This will depend on the role the employee was undertaking and the typical notice period that applies for that job in that industry, the notice period of any colleagues who have express contractual terms, the employee’s length of service and their salary or seniority. Cases that have been brought in the courts have found that an office manager was entitled to three months’ notice; a company director was entitled to six months’ notice; and a director of international operations, to twelve months’ notice.

Irrespective of how much notice your employee is entitled to receive, you do not count the date on which notice is given as part of your calculation. For example, if you are required to give one week’s notice and do so on Monday 10 February, it will expire on Monday 17 February (which will be the last day of work).

Where notice is expressed in months, a rule known as the "corresponding date" rule applies. This provides that a notice period of a month or months will end on the corresponding date in the relevant month. So, two months' notice given on 10 January will make 10 March the last day of employment.