Notice Period Meaning, Types & Rules

What is notice period? It refers to the time between when an employee submits their resignation or receives a termination notice and their final working day at the company.

When an employee resigns, the notice period starts from the resignation date and lasts until their last day at work.
Similarly, when an employer terminates employment, they must inform the employee in advance, as per applicable notice term rules, giving them time to prepare before leaving.

The purpose of this policy is, therefore ensure a smooth handover of responsibilities and help both the employee and the company manage the transition effectively.

Types of Notice Period

Statutory Notice Period

The statutory employment notice period is the minimum notice an employer or employee must give, as required by law. It varies by country to ensure fair treatment for both parties. For example, in the UK, employees must receive at least one week’s notice after one month of service. Plus, an extra week for each year worked, up to a maximum of 12 weeks.

Contractual Notice Period

A contractual notice period is the duration of notice that both parties agree upon in the employment contract, either in writing or verbally. It is usually longer than the statutory employment exit notice and cannot be shorter. Additionally, the contract may specify different notice lengths for the employer and the employee, depending on the terms mutually agreed upon.

Probationary Notice Period

During the probationary period, notice requirements are usually shorter, anywhere from one day to three months or none at all. This gives both the employer and the employee the flexibility to end the employment relationship with fewer formalities. Moreover, this initial phase is meant to evaluate the employee’s performance and fit for the role. The duration of probation varies based on company policy and the specific job.

Payment in Lieu of Notice (PILON)

PILON occurs when an employer ends an employee’s contract immediately but still pays them for the notice period they would have worked. This payment may cover salary, unused holiday, commissions, and any lost benefits. Furthermore, employers often use it when they prefer the employee not to work through their exit notice duration or when ending employment without prior notice.

Garden Leave

The employer typically instructs the employee to stay away from work during their notice period while continuing to pay full salary and benefits. Although the employee remains officially employed, meanwhile, the employer restricts them from starting a new job or working for competitors during this time. In some cases, employers also use garden leave alongside a required notice timeframe buyout, especially when they prefer immediate separation.

Waived Notice

Waived notice happens when the employer and employee mutually agree to skip the notice term. Hence, this allows the employee to leave the organization right away without any penalties or compensation requirements. Notably, employers commonly use it in friendly departures where a quick exit suits both sides.

Zero-Hour Contracts

Zero-hour contracts usually do not have a set termination period. Subsequently, employees can choose not to work without giving notice, effectively leaving without a formal resignation. Similarly, employers can stop offering work without notice, although the contract remains in effect until either party formally ends it.

Frequently Asked Questions

Q1.	What is a notice period in a job?
Ans.	A notice period is the time an employee or employer must give before ending the employment. It allows time for transitions, like handing over responsibilities, and can vary based on the contract or company laws.
Q2.	Is a notice period mandatory?
Ans.	Yes, a notice period is mandatory in most employment situations. It allows both the employer and the employee time to plan for the transition. For instance, employees can complete pending tasks, and employers can find a replacement or adjust work responsibilities. The required notice timeframe may vary based on the employment contract or local labor laws.
Q3.	How long is a typical notice period?
Ans.	A typical employee notice period can usually range from two weeks to three months, based on the country, industry, and employment contract. For senior roles or niche industries, they can be as long as six months.
Q4.	Can an employee leave without serving the notice period?
Ans.	Yes, but it depends on the situation. While notice is usually required, employees may leave without it in cases like personal emergencies or workplace issues. However, this can impact professional relationships and may lead to loss of benefits or negative references.
Q5.	How can HR manage employee notice periods effectively?
Ans.	To manage employee notice periods effectively, the following HR best practices should be followed: 1. Document Resignation: Ensure the resignation is recorded and acknowledged. 2. Verify Contractual Obligations: Confirm the employee’s termination period as per their contract and ensure it is adhered to. 3. Plan for Transition: Begin preparing for the employee’s departure by identifying the need for replacement or redistributing responsibilities. 4. Recruitment Process: Start the hiring process for a replacement if needed, to avoid disruptions. 5. Offboarding: Manage offboarding tasks, including knowledge transfer, return of company property, and clearance. 6. Exit Interviews: Conduct exit interviews to gather valuable feedback for improving the workplace. 7. Support Employee: Offer support to the employee during their transition, including clarity on notice period salary, to ensure a positive departure and maintain professional relationships.
Q6.	What should I put as my notice period on a job application?
Ans.	Write your actual notice period. Usually, the common termination ranges from two weeks to a month. If you’re not employed, you can state your immediate availability or adjust your schedule to meet the employer’s needs.