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2nd May 2024

What happens if your employee doesn’t work their notice period?

When an employee decides to leave their job, whether it's to move on to better opportunities or for personal reasons, there's a standard process to follow: handing in their resignation and working their notice period.

The notice period is a crucial part of leaving a job, and it's a professional courtesy within your business.

But what happens if an employee decides not to work their notice period?

In this article, we'll explore the consequences of an employee not working their notice period and the legality of it.

Understanding notice periods

A notice period is the length of time an employee or employer must give to end employment. This period is usually defined in the employment contract and can vary depending on the employee's role, seniority, and the company's policies.

Typically, notice periods in the UK range from one week to three months, although they can be longer in some cases.

Standard notice periods

Typically, the statutory notice periods are as follows:

  • For employees with at least one month but less than two years of continuous service, the minimum notice period is one week.

  • For employees with two years or more of continuous service, the minimum notice period is two weeks.

Employment contracts

Employers may stipulate longer notice periods in the employment contract, which employees are required to adhere to.

These contractual notice periods can vary widely depending on the terms negotiated between the employer and employee.

For example, if an employee is at a senior level, they may have an updated contract for three months but may be able to negotiate to work six weeks depending on the employer.

Not working to the extent of the contract results in a breach of contract which could escalate to legal action, we will discuss this further in more detail.

Sector-specific notice periods

Some sectors may have specific notice periods outlined in employment regulations or collective bargaining agreements.

For example:

  • In the healthcare sector, notice periods may be longer, up to three months, due to the need for continuity of patient care.

  • In education, notice periods for teachers and academic staff may differ from those in other sectors and are usually term-based.

  • Manufacturing sectors often only require one to two weeks due to high turnover.

  • In the financial sector, especially for senior roles, notice periods can be longer to allow for proper handover of responsibilities to the new starter.

Seniority and role

Notice periods can also vary based on the seniority of the employee and the nature of their role within the organisation.

Senior executives or employees in critical roles may have longer notice periods to facilitate smoother transitions, as mentioned above, due to high responsibility, skill set, and handover.

Within these roles, there needs to be a sufficient replacement prepared before final resignation.

Probationary periods

During probationary periods, which are typically the first three to six months of employment, notice periods may be shorter or may not apply at all.

This allows both the employer and the employee to terminate the employment relationship more easily if it's not a good fit.

Consequences of an employee not working their notice period:

Breach of contract

When an employee signs an employment contract, they agree to abide by the terms and conditions stated within it.

Not working the notice period is considered a breach of contract. By leaving the job without working the notice period, the employee is violating the terms of the employment contract, which could have legal consequences depending on how the employer has taken the resignation.

Financial implications

Working the notice period ensures that the employee will receive their regular salary up until their last day of work. If they choose not to work their notice period, the employer may withhold payment for the days they didn't work. This could result in a significant loss of income, depending on the length of the notice period.

Negative reference

An employee's employment history and the professional relationships they've built are essential for their career advancement. If they don't work their notice period, it's likely that they'll leave on bad terms with their employer.

As a result, the employer may provide a negative reference when future employers contact them, which could harm the employee's chances of securing a new job and maintaining good work relationships in the future.

Legal action

As mentioned earlier, not working the notice period is a breach of contract. In some cases, the employer may take legal action against the employee for failing to fulfil their contractual obligations. This could result in financial penalties meaning pay loss or even a lawsuit.

Exceptions to an employee not working their notice period

While working the notice period is usually non-negotiable, there are some exceptions where an employee may not be required to work their full notice period. These consist of the following:

Garden leave: Some employers may place the employee on garden leave during their notice period. This means they're still technically employed by the company, but they're not required to work. Instead, they'll receive their regular salary until their notice period ends. Garden leave is common for those who are moving to a competitor, or if there has been a work relationship issue that leaves the workplace wanting the employee out of the way.

Payment in lieu of notice (PILON): In some cases, the employer may choose to pay the employee in lieu of notice, meaning they'll pay them for the duration of their notice period but ask them not to work. This is common among employees who are on sick leave, unfit to work, or simply when there is not enough work to be done.

Mutual agreement: If both the employee and the employer agree, the employee may be able to leave their job without working their full notice period. This is at the discretion of the employer, and they're not obligated to agree to this arrangement.

Notice period FAQs

What if the employee becomes ill or unfit to work during their notice period?

If an employee becomes ill during their notice period, they should inform their employer as soon as possible. They may be entitled to sick leave during their notice period, depending on their employment contract and company policies.

The employer may require a doctor's note to verify the illness. It's best to communicate with the employer and keep them informed about the situation. In some cases, the employee may agree to opt for Payment in lieu of notice (PILON) depending on their sick leave history.

What if the employee is outside of the country when handing in their notice?

If the employee is outside the UK when they hand in their notice, it doesn't necessarily affect their notice period, but it might affect the way they give notice. They may have to return to the UK and then work their notice period if they are unable to do so remotely or on a hybrid basis.

When to handle the employee's final pay

An employee should get their final pay on the date they are normally paid. If they were to leave in the middle of the month but are normally paid at the end of the month, their final pay would be at the end of the month. This can be agreed with the employer if needed differently.

Does the employee need their final payslip?

All employees are legally entitled to their final payslip and P45 when leaving a business.

What are the employee's rights to still receive benefits during their notice period?

If an employee is working their notice or placed on garden leave, they are still entitled to receive normal pay and benefits during their notice period as they are still employed for this period.

This includes private health insurance, pension contributions, and any other benefits. However, if the employer pays the employee in lieu of notice, then they may not receive all their benefits due to the contract coming to immediate termination.

Can the employer force the employee to take their outstanding holiday during their notice period?

Yes, the employer has the right to ensure that the employee uses up their annual leave during their notice period.

This would only be legal if mentioned within the contract of employment. If this is not within the employee's employment contract, then the employer should give them advanced notice, which is at least double the number of leave days they want them to take.

For example, if the employee has 5 days of holiday remaining, they must be given at least 10 days’ notice to take those days as holidays.

HR and Payroll Advice with PayEscape

Remember, ensuring a smooth transition when an employee leaves their job is crucial for both the employee and the employer.

By understanding the importance of notice periods and the consequences of not working them, both parties can maintain their professional reputations in the long run. At PayEscape, we offer payroll and HR services and advice. Get in touch with an expert online today.

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