Glossary: HR & Recruiting Definitions
A notice period refers to the amount of time that must pass before an employee can legally leave their position at a company.
A notice period is a time between an employee notifying their employer that they will be leaving, or being let go from the business, and them actually leaving the company. A notice period is usually specified in an employment contract.
The notice period is in place to protect both the employee and employer. It provides both parties with a period of time in which they can complete a handover, negotiate alternatives, take care of an offboarding, and hire a suitable replacement or transfer their responsibilities to an existing employee before the employment agreement ends.
The standard notice period differs from country to country. For example, there is a standard notice period in Germany of four weeks. In the UK, statutory notice periods, specifically for redundancy, are at least one week’s notice if the employee is employed between one month and 2 years, and one week’s notice for each year if employed between 2 and 12 years. Therefore, it is worth checking employment laws in your country when writing a contract.
Of course, notice periods often differ depending on the seniority of the role too. For example, it is common for senior-level employees to have notice periods of up to 3 months. C-level executives can even have notice periods of up to 6 months.
A notice period is usually triggered by an employee handing in a resignation letter, or notice letter, or receiving a letter of dismissal from the business. In this letter the intended leaving date will be mentioned.
While an employee is legally bound to the notice period set in their contract, it is possible to reduce this set notice period if both the employer and employee agree to it.
In some cases, this may be worth considering for the employer, for example, if they are able to replace the employee easily. It may also save the business from keeping the employee on the payroll for longer than they need to while allowing the employee to start their new role quicker.
An employee’s notice period can also be reduced by the employer if they are being dismissed on certain grounds. For example, in cases of gross misconduct, dismissal without notice is possible.
However, in these circumstances, a thorough investigation and reasoning is needed to avoid cases of unfair dismissal.
Employers may also choose to pay an employee through their notice period but ask the employee to stop working immediately. This can be called payment in lieu of notice, or garden leave.
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