In the UK, the statutory minimum notice period for employment termination is outlined in the Employment Rights Act 1996 (ERA 1996). However, the contract of employment can stipulate a longer notice period.

Statutory Minimum Notice Periods

The minimum notice period an employer or employee must provide depends on the employee's length of service:

• For at least one month but less than two years of service: One week's notice
• For two years or more of service: One week's notice for each complete year of service, up to a maximum of 12 weeks

For instance, an employee who has been with the company for five years would be entitled to five weeks' notice.

Notice Periods in Employment Contracts

An employment contract can stipulate a longer notice period than the statutory minimum. This applies to both the employer and the employee. However, the extended notice period must be reasonable.

Garden Leave

In some cases, employers may place an employee on garden leave during their notice period. This means the employee is still employed and receives their salary but is not required to work. This is typically done to prevent the employee from having access to confidential information or to avoid disruption during the handover period. There's no legal right to pay during garden leave, but it's a common practice unless the contract states otherwise.

Payment in Lieu of Notice (PILON)

Employers can choose to pay an employee their salary for the notice period instead of requiring them to work it. This is known as payment in lieu of notice (PILON). While PILON is legal, it's important to note that employees who receive PILON may lose certain benefits they would have accrued during their notice period, such as accrued vacation time. Also, employees who receive PILON may have difficulty claiming unemployment benefits immediately.

In the UK, there is no general legal requirement for employers to pay severance to employees upon termination. However, there are specific circumstances where employees are entitled to compensation.

Statutory Redundancy Pay

Statutory redundancy pay applies if an employee is dismissed due to redundancy. To be eligible, the employee must have worked continuously for the employer for at least two years and be dismissed due to a genuine redundancy situation, such as the role no longer being needed.

Calculating Statutory Redundancy Pay

The amount of statutory redundancy pay is based on the employee's age, length of continuous service, and weekly pay. The age brackets are as follows:

• Under 22 years old: Half a week's pay for each full year of service
• 22-41 years old: One week's pay for each full year of service
• Above 41 years old: One and a half week's pay for each full year of service

The length of continuous service is capped at a maximum of 20 years. The weekly pay is capped at a maximum weekly amount set by the government. For redundancies after April 6th, 2023 this amount is £643.

Contractual Severance Pay

Some employers may offer contractual severance pay exceeding the statutory redundancy pay. These would be outlined in the employment contract.

Settlement Agreements

In cases of dispute, employees and employers may agree on a settlement agreement. This often includes a severance package in exchange for the employee waiving any potential legal claims against the employer.

Employment termination in the UK falls into several primary categories. These include dismissal by the employer, resignation by the employee, end of a fixed-term contract, and mutual agreement.

Types of Termination

• Dismissal by the Employer: Initiated by the employer due to reasons like employee misconduct, redundancy, or poor performance.
• Resignation by the Employee: The employee voluntarily chooses to leave their position.
• End of Fixed-Term Contract: Employment ends naturally as per the agreed-upon end date of a fixed-term contract.
• Mutual Agreement: Both employer and employee agree to end the employment relationship.

Fair Dismissal

UK employment law protects employees from unfair dismissal. A dismissal is only considered fair if the employer follows proper procedures and has one of the following legally valid reasons:

• Capability or Qualifications: The employee is unable to perform their job to an acceptable standard, even with support, or they lack necessary qualifications.
• Conduct: The employee has committed a serious act of misconduct.
• Redundancy: The employee's job is no longer needed within the organization.
• Statutory Restriction: Employment law prohibits the person from continuing in the role (e.g., losing a required license).
• Some Other Substantial Reason (SOSR): A catch-all category, this could include situations like a breakdown in trust or personality conflicts.

Procedures for Dismissals

Employers must follow specific procedures when dismissing an employee in the UK:

Warnings & Improvement Plans

• Before termination (except for gross misconduct), employers should typically undertake a fair disciplinary procedure.
• This commonly involves verbal and written warnings, setting clear expectations, and offering the chance for improvement.

Right to Written Reasons

• Employees with two or more years of service can request a written statement detailing the reasons for their dismissal. The employer must provide this within 14 days.

Wrongful vs. Constructive Dismissal

• Wrongful Dismissal: Occurs when the employer terminates the employment contract without proper notice or a fair reason.
• Constructive Dismissal: This happens when the employee resigns due to the employer's serious breach of the employment contract, making it impossible for them to continue working.

Redundancy Process

Redundancy dismissals follow specific procedures:

• Consultation: Employers must consult with affected employees to explore alternatives to redundancy.
• Selection Criteria: Transparent and fair criteria must be used to select employees for redundancy.