Notice periods seem simple but there can be a wide range of circumstances. DAVID WRIGHT explains where you stand as an employer

DAVID WRIGHT

Staff Strategy

The reasons for staff leaving vary. Many employers hold exit interviews to improve future retention. Sometimes it’s the employer who gives notice, and this could be a dismissal, redundancy, ill health termination or failure to pass probation.

An employee must receive at least one week’s notice if they have a month’s service. Thereafter, it’s a week for each full year of service up to a maximum of 12 weeks, except if they are dismissed for gross misconduct, when the dismissal is immediate.

I sometimes read in contracts that “the minimum notice from either party is one month”. Why would you give an employee who has two years’ service four weeks’ notice when they are only entitled to two? Similarly, if the employee has seven years’ service then a month’s notice isn’t adequate.

The practicalities

Notice starts the day after it is given. The employee, irrespective of whether they work their notice, should receive the pay they would normally have received had they worked. Your contract might allow pay in lieu of notice, in which case the employment ends earlier but the notice lump sum is then taxable.

If there isn’t a “pay in lieu” provision, then in theory you are breaching the contract by imposing it. But I have yet to experience an employee who wasn’t happy to accept payment for not working their notice, especially when it can be paid as a tax-free lump sum in these circumstances.

However, there are other potential implications, so it’s an issue you should get advice on.

In their notice, an employee should receive their normal rate of pay including benefits. So, you can’t suddenly stop commission or holiday pay, for example.

What about notice from the employee?

Many salons only ask for one week’s notice to protect their client base. Some ask for four weeks, but any number could be added. The situation to avoid is where you ask for four weeks then end up paying four weeks’ pay in lieu – in other words, paying the employee not to work.

The notice you require doesn’t have to increase with length of service. It’s fine to have therapists on one week’s notice, receptionists on four weeks and a manager on six weeks. I’ve seen contracts where staff are required to give 12 weeks’ notice. It isn’t illegal but enforcing it can be a real problem. What do you do if the employee decides to underperform? You need to cover bookings, but if employees want to go then sometimes it’s better just to let them.

I get dozens of calls about notice every month, often about how to make the employee leave earlier than planned. In reality, the employer can’t escape paying for the notice they have asked for in their contract.

Common myths

Employers often think if an employee doesn’t have two years’ service they can do what they like. This isn’t true. If you don’t give an employee the basic one week’s notice, for example in their probation period, they can’t claim unfair dismissal but they can still claim “wrongful dismissal”.

You can require an employee to take holiday in their notice period but you must give notice of at least double the number of leave days you want them to take. You should also have a contractual right to recover any overpayment of holiday pay in you contracts.

An employer doesn’t have to receive notice in writing. If you are advised verbally that an employee is leaving, I’d advise that you immediately hand-deliver your written acceptance of the verbal notice given.

If an employee changes their mind and wants to withdraw their resignation, you don’t have to accept the withdrawal. However, reconsideration might be appropriate if the resignation was made in the heat of the moment.

David Wright is a consultant in all aspects of employment practice and law. He is the main employment law consultant for Habia and provides a personalised support service for UK salons.

Tel: 01302 563691 davidwrightpersonnel.co.uk