Notice Requirements under an Employment Contract

Notice Requirements under an Employment Contract

Minimum Notice Employees have a right to be given notice or payment in lieu of notice before termination in accordance with the statutory minimum or the terms of the employment contract (whichever is greater). The statutory minimum notice period depends on the length of employment.

Dismissal without Notice

In cases of gross misconduct it may be possible to dismiss an employee without giving notice. This power of summary dismissal should be exercised with caution and is generally reserved for cases where the employee is engaged in dishonesty, competitive activities, theft, violence, wilful disobedience, falsification of records or other similarly grave misconduct.

It may be appropriate to insert a list of types of serious misconduct (which list should be stated to be non-exhaustive) which justify summary dismissal in the employment contract and/or your disciplinary procedure.

However, whether a case would justify summary dismissal should always be considered on its individual facts and circumstances.

Notice and Payment in Lieu

In theory, an employee can demand to work his notice and refuse to be paid in lieu (unless the employer has reserved an express right to do so in the employment contract).

However, up to £30,000 payment for loss of employment will be generally tax-free. Whereas, the wages paid to an employee working out his notice will be taxed. HMRC generally consider that if the right to pay money in lieu is contractually reserved (rather than in genuinely ex gratia) the £30,000 exemption does not apply.