UK Notice Periods explained

UK Notice Periods: What Employers Must Give and Receive

A notice period is the amount of time an employee must work, or be paid for, after their employment ends. In the UK, notice periods are governed by a combination of statute and the employment contract, and getting them wrong can lead to claims for wrongful dismissal or breach of contract.

As an employer, you need to know two things: how much notice you must give when ending someone's employment, and how much notice you can expect when an employee resigns. The rules are straightforward once you understand the distinction between statutory and contractual notice, but there are some common traps that catch employers out.

This guide covers the statutory minimums, the difference between contractual and statutory notice, PILON, garden leave, and what happens during redundancy, so you can manage notice periods correctly every time.

What Is a Notice Period and Why Does It Matter to Employers?

A notice period is the window between the moment employment is terminated (by either side) and the actual end date. It gives both the employer and the employee time to prepare for the transition. The employer can recruit a replacement or hand over work, and the employee can look for a new role.

In UK law, notice periods come from two sources.

The first is statute: the Employment Rights Act 1996 sets out minimum notice periods that apply regardless of what the contract says. The second is the employment contract, which can specify longer notice periods but never shorter ones.

If you fail to give the correct notice, you may face a wrongful dismissal claim. This is different from unfair dismissal. Wrongful dismissal is about breaching the contract; unfair dismissal is about the reason for dismissal. Both can be expensive.

For example, an employee with 5 years' service is entitled to at least 5 weeks' statutory notice. An employee with 15 years' service is entitled to 12 weeks (the maximum).

These are minimums. Your contract can offer more generous notice, but it cannot reduce the statutory minimum below what the law requires.

For employees, the statutory minimum is simpler: anyone who has been employed for more than one month must give at least one week's notice. Again, the contract can require more.

What Is the Difference Between Statutory and Contractual Notice?

Statutory notice is the legal floor. It applies automatically and cannot be contracted out of. If your contract is silent on notice, the statutory minimum applies.

Contractual notice is whatever the employment contract specifies. It can exceed the statutory minimum but must not fall below it. Many UK employers set contractual notice at one month for junior roles and three to six months for senior positions.

Here is where it gets important. If your contract says "one month's notice" and the statutory minimum for that employee is three weeks, the contractual notice (one month) applies because it is more generous. But if your contract says "one week's notice" and the statutory minimum is three weeks, the statutory minimum applies because it is higher. You cannot contract below the statutory floor.

When contractual notice is silent, the statutory minimum applies by default. This is why it is worth getting the contract right from the start.

How Much Notice Must an Employee Give?

The statutory minimum notice an employee must give is one week, provided they have been employed for more than one month. If they have been employed for less than one month, there is no statutory notice requirement (though the contract may still require it).

In practice, most contracts specify a longer notice period for employees. One month is common for mid-level roles, and three months is typical for senior or specialist positions. The employee is bound by whatever the contract says, provided it is not less than the statutory minimum.

If an employee leaves without giving the correct notice, they are in breach of contract. In theory, the employer could claim damages for the breach. In practice, this is rarely worth pursuing unless the employee's departure causes a significant and quantifiable loss (such as lost revenue from a cancelled project).

What Is PILON (Payment in Lieu of Notice)?

PILON is a common practice where the employer ends the employment immediately and pays the employee for the notice period instead of requiring them to work it.

There are two types of PILON:

Contractual PILON. If the employment contract includes a PILON clause, the employer can terminate employment immediately and pay the notice period as a lump sum. This is a clean, pre-agreed arrangement. The payment is treated as earnings and is subject to tax and National Insurance.

Common law PILON. If there is no PILON clause in the contract, making a PILON payment is technically a breach of contract by the employer. The payment is treated as damages for breach of contract and, under HMRC rules, is subject to tax and NICs on the amount the employee would have earned during the notice period.

In either case, the employee should receive all the pay they would have earned during the notice period, including any benefits, pension contributions, and holiday accrual.

PILON is useful when you want to end employment quickly, for example, if the employee is going to a competitor or if their continued presence would be disruptive. But it must be handled correctly to avoid wrongful dismissal claims.

What Is Garden Leave and When Should You Use It?

Garden leave is different from PILON. On garden leave, the employee remains employed (and continues to be paid) during their notice period, but they are asked not to come into work and are typically excluded from company systems, premises, and contact with colleagues and clients.

Garden leave is commonly used when:

• The employee is leaving to join a competitor, and you want to protect client relationships and confidential information.
• The employee has access to sensitive data or strategic plans.
• You want to prevent the employee from influencing other staff during the transition.

During garden leave, the employee is still bound by the terms of their contract, including confidentiality obligations, restrictive covenants, and the duty of good faith. They cannot start working for a new employer during this period.

The main advantage of garden leave over PILON is that the employee remains contractually bound for longer, which gives the employer more time to protect its interests. The disadvantage is that the employee remains on the payroll and may be entitled to benefits during the period.

Statutory redundancy pay is calculated separately from the notice period. It is based on the employee's age, length of service, and weekly pay (capped at £751 per week for dismissals from 6 April 2026). Employees need 2 years' service to qualify.

Working with an EOR means you do not need to be an expert in UK employment law to manage notice periods correctly. The EOR takes care of the legal detail so you can focus on the people decisions.

Find out more about how Agility EOR manages UK employment compliance.

Employer Notice Period Checklist

Here is a practical checklist for managing notice periods:

1. Check the contract first. Always check the employment contract before giving or receiving notice. The contractual terms override the statutory minimum if they are more generous.
2. Give notice in writing. Verbal notice can be valid, but written notice is safer. It removes any doubt about when notice was given and what was said.
3. Calculate the end date correctly. Notice starts the day after it is given. If you give notice on Monday, the notice period starts on Tuesday.
4. Decide on PILON or garden leave early. If you do not want the employee to work their notice, decide whether to pay in lieu or place them on garden leave, and make this clear in the notice letter.
5. Pay everything owed. The employee is entitled to pay for the full notice period, any outstanding holiday, and any contractual bonuses or commissions that have been earned.
6. Issue the P45 promptly. The P45 must be issued on or after the final day of employment. Delays cause problems for the employee's tax affairs.
7. Document the process. Keep a record of when notice was given, how it was delivered, and what was agreed. If a dispute arises, this documentation will be essential.
8. Consider restrictive covenants. If the employee has post-termination restrictions (such as non-compete or non-solicitation clauses), check whether they are triggered by the notice period and plan accordingly.