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Notice Period Guide for UK Employers: Statutory & Contractual

A comprehensive guide to statutory and contractual notice periods in the UK, including payment in lieu of notice, garden leave, and managing the notice period process.

The Grove Team

Grove HR

12 March 20266 min read
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Quick Answer: What is the Statutory Notice Period?

Statutory notice period in the UK depends on length of continuous service:

Length of ServiceNotice Required (Employer to Employee)Notice Required (Employee to Employer)
1 month to 2 years1 week1 week
2–12 years1 week per year of service1 week (unless contract states more)
12+ years12 weeks (maximum)1 week (unless contract states more)

Example: An employee with 7 years' service is entitled to 7 weeks' statutory notice from the employer. The employee only needs to give 1 week's notice (unless their contract states otherwise).

Use our notice period calculator for quick calculations.


Statutory vs Contractual Notice

Statutory Notice

Statutory notice is the legal minimum set by the Employment Rights Act 1996. It cannot be reduced by contract.

Contractual Notice

Most employment contracts specify a longer notice period than the statutory minimum. Common contractual notice periods:

Role LevelTypical Notice Period
Junior / Entry level1 month
Mid-level1–3 months
Senior / Management3–6 months
Director / Executive6–12 months

The longer of statutory or contractual notice applies. If the contract says 1 month but statutory entitlement is 7 weeks, the employee gets 7 weeks.


Payment in Lieu of Notice (PILON)

PILON allows the employer to end employment immediately by paying the employee for their notice period instead of having them work it.

Tax Treatment of PILON

Since April 2018, PILON payments are always taxable (income tax and NI), regardless of whether the contract contains a PILON clause.

Key Rules

  • If the contract contains a PILON clause, the employer can make the payment without breach of contract
  • Without a PILON clause, ending employment without notice is technically a breach of contract (even if you pay)
  • PILON should cover basic pay plus any contractual benefits the employee would have received during notice

Garden Leave

Garden leave is where the employee remains employed during their notice period but is not required to attend work or perform duties.

How Garden Leave Works

  • The employee remains on the payroll with full pay and benefits
  • They cannot work for another employer during this period
  • They must remain available if the employer needs them
  • Restrictive covenants continue to apply

Garden Leave Clause

A garden leave clause in the employment contract is strongly recommended. Without one, you may not be able to enforce garden leave, and the employee could argue they have a right to work.


Holiday During Notice

Employees continue to accrue annual leave during their notice period.

QuestionAnswer
Can the employee take holiday during notice?Yes, with normal approval
Can the employer force the employee to take holiday during notice?Yes, with notice of at least 2× the leave duration
Is accrued but untaken holiday paid on termination?Yes, this is a legal requirement

Managing Notice Periods with Grove

Grove automates notice period management:

  • Contractual notice tracking from employee records
  • Notice period calculator based on service length
  • Offboarding checklists triggered when notice begins
  • Final pay calculations including accrued holiday
  • Document generation for notice confirmation letters

Use our free notice period calculator or get started with Grove.

Tags:

notice periodPILONgarden leaveUK employment lawresignation

The Grove Team

Grove HR

The Grove Team writes about HR best practices, compliance, and workplace culture for Grove. Helping UK businesses cultivate thriving teams.

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