04 July 2008
Department for Innovation, Universities and Skills (DIUS)
 
You are here:
 

Rights to notice and reasons for dismissal

URN No: 07/534

 

Contents

Introduction

This document outlines the provisions relating to rights to notice and written reasons for dismissal contained in employment legislation and explains how a complaint is settled. It gives general guidance only and should not be regarded as a complete or authoritative statement of the law. This booklet does not deal with an employee’s right under the legislation to make a complaint to an employment tribunal if he or she considers he or she was unfairly dismissed. For information on this right see the document Unfairly Dismissed?.

Further information can be obtained from any office of the Advisory, Conciliation and Arbitration Service (Acas).

Rights to notice

Legislation gives the right both to employer and employee of a minimum period of notice of termination of employment, provided that the employee has been continuously employed for one month or more.

If a contract of employment gives the employer or the employee rights to longer notice than the minimum in the legislation, then the longer period of notice applies.

The legislation does not prevent either employers or employees from waiving their rights to notice or from accepting a payment in lieu of notice. Nor does the Act affect the right of either party to terminate the contract without notice if the conduct of the other justifies it. The question of whether termination without notice is justified depends on the circumstances of the individual case and in the event of dispute can be finally determined only by the courts or employment tribunals.

Where the right to minimum notice does not apply

The employee’s right to a minimum period of notice does not apply to:

  • anyone who is not an employee, for example an independent contractor or free-lance agent;
  • a person employed as a seaman on a ship registered in the United Kingdom under a crew agreement the provisions and form of which are of a kind approved by the Secretary of State for Transport;
  • Crown servants and members of the armed forces;
  • generally, employees who have fixed-term contracts (see Fixed-term contracts).

Continuous employment

A period of continuous employment forms the basic qualification for a number of individual rights under the employment protection legislation, including rights to notice and to receive a written statement of reasons for dismissal; each right has its own qualifying period. The document Continuous employment and a week’s pay sets out the method of calculating the period of continuous service.

Note: The period spent by trainees on certain (but not all) Government training schemes does not count towards a period of continuous employment because the trainees are not employees (that is, they are not working under a contract of employment). Further information and advice on this point may be obtained from any office of the Advisory, Conciliation and Arbitration Service, the addresses of which are given at the end of this document.

Notice to be given by an employer

An employer is required to give an employee:

  • at least one week’s notice if the employee has been employed by the employer continuously for one month or more but for less than two years;
  • at least two weeks’ notice if the employee has been employed by the employer continuously for two years’ and
  • one additional week’s notice for each further complete year of continuous employment for a period of less than 12 years’ continuous employment; and at least 12 weeks’ notice if the employee has been employed by the employer continuously for 12 years or more.

Notice to be given by an employee

An employee is required to give his or her employer at least one week’s notice if employed continuously for one month or more by that employer. This minimum is unaffected by longer service.

Fixed-term contracts

Generally, no notice of the expiry of a fixed-term contract will need to be given, but if the contract is terminable by notice before its expiry the minimum notice provisions (see above) will apply to such early termination.

Employees who were originally engaged on a contract specifying a fixed term of one month or less, but who are continuously employed for three months or more, are regarded for the purpose of the legislation as being employed for an indefinite period and are therefore entitled to a minimum period of notice. This benefits employees who are employed under a series of short-term contracts.

Apprentices

Apprentices come within the definition of employee in the legislation. Normally a contract of apprenticeship will in effect be a fixed-term contract of some years’ duration and no notice will need to be given under the legislation on its completion. If, however, it is terminated before completion, the minimum period of notice provisions (see above) will apply. If an apprentice remains with the employer after completing apprenticeship, the period as an apprentice counts for the purpose of qualifying for rights to notice under the legislation.

When notice can be given

Unless a contract states otherwise, notice can be given on any day. Normally the period of notice will run from the start of the following day so that if, for example, a week’s notice is given on a Monday, the period of notice will begin on the Tuesday and expire at the end of the following Monday. But there may be conditions in the contract to be taken into account. The contract may, for example, say that notice can only be given so as to expire at the end of a pay week.

Termination of employment on redundancy

An employee who is being dismissed as redundant is still entitled to receive due notice of termination under his or her contract or the legislation, whichever provides the longer period. However, it is important to note that where the employment is terminated because of redundancy, there are, or may be, certain other requirements. See documents Redundancy consultation and notification and Redundancy entitlement - statutory rights.

Transfer of an undertaking

When a business or undertaking, or part of it, is transferred to a new owner, employees who are employed by the old owner at the time of the transfer automatically become the employees of the new owner, as if their contracts of employment were originally made with the new owner. The new owner takes over the employment liabilities of the old owner, with the exception of criminal liabilities and occupational pension rights. See the document: A guide to the 2006 TUPE Regulations for employees, employers and representatives.

Right to minimum pay during the notice period

An employee whose contract of employment specifies normal working hours and who works throughout those hours during the period of notice is entitled to receive normal pay for that period in accordance with the terms of contract.

With certain exceptions (see Where the provisions relating to minimum pay during the notice period do not apply below), in the case of an employee whose contract of employment specifies normal working hours, the legislation provides for a minimum hourly rate of pay during the minimum period of notice for any period during normal working hours that the employee is:

  • ready and willing to work, but no work is provided;or
  • incapable of work because of sickness or injury; or
  • absent from work wholly or partly because of pregnancy or childbirth or on adoption, parental or paternity leave; or
  • on holiday in accordance with the terms of employment.

The minimum average hourly rate of pay is produced by dividing a week’s pay by the number of normal weekly hours. Detailed provisions for calculating a week’s pay under the legislation are set out in the document Continuous employment and a week’s pay.

Subject to the same exceptions, in the case of an employee whose contract of employment does not specify normal working hours, the legislation guarantees a week’s pay for each week during the minimum period of notice when the employee is:

  • ready and willing to do work of a reasonable nature and amount to earn a week’s pay; or
  • incapable of work because of sickness or injury; or
  • absent from work wholly or partly because of pregnancy or childbirth or on adoption, parental or paternity leave; or
  • on holiday in accordance with the terms of employment.

This right applies whether it is the employer who gives notice or the employee. Where it is the employee who gives notice, the legislation does not require the employer to make the minimum payment referred to above unless and until the employee leaves the employer’s service in accordance with the notice given.

Where the provisions relating to minimum pay during the notice period do not apply

The guarantee of minimum pay during the notice period under the legislation, outlined above, does not apply:

  • to an employee whose contract of employment specifies a period of notice which is at least one week longer than the statutory minimum period (see Notice to be given by an employer). In this case, payment during the notice period will depend only upon the terms of the contract of employment;
  • to an employee who, after giving notice, takes part in a strike of employees of the employer on or before the termination of the contract;
  • to any time which employees are allowed off during the period of notice at their own request. Employees may, however, be entitled under separate provisions of legislation to payment for time off to look for work or to arrange training (if they are facing redundancy), to undertake union duties (if they are trade union officials) or for antenatal care, see the document Individual rights of employees for a brief explanation of these rights.

Reduction of minimum pay during the notice period

An employee is not entitled to be paid twice for the same period. If, therefore, during the period of notice an employee is paid sick pay, maternity pay, paternity pay or adoption pay by the employer (in each case whether statutory or not), or is on holiday in accordance with the terms of the contract and is receiving holiday pay, the employer may reduce the notice pay by the amount of sick pay, maternity pay, paternity pay, adoption pay or holiday pay which is paid to the employee provided it is in respect of the same period.

Under some company sick pay schemes, employers take account of National Insurance sickness or industrial injury benefit in determining the amount of sick pay. In such cases, National Insurance benefits may be taken into account when calculating minimum pay during the notice period if an employee is away from work because of sickness or injury. Where, however, the employee has exhausted his or her entitlement to sick pay under the employer’s scheme, or where the scheme does not provide for National Insurance benefits to be taken into account, the employer is not entitled to deduct such benefit from the minimum pay required to be paid under the legislation.

Again, these provisions do not apply where the employee’s contract of employment specifies a period of notice which is at least one week longer than the statutory notice period.

Insolvency of an employer

Under the insolvency provisions of the legislation the Department of Trade and Industry may pay from the National Insurance Fund certain debts owed to employees by insolvent employers. These include arrears of pay (including sick pay), holiday pay and a compensatory notice payment if employees have suffered financially because they have not been given proper notice. The arrangements are explained in the document Redundancy and insolvency - a guide for employees.

Making a complaint about notice and minimum pay

The rights to minimum notice and to minimum pay during the notice period can be enforced in the same way as terms specified in a contract of employment. In other words, employers or employees who consider that they have incurred loss because they have not been given the minimum notice (and/or, in the case of employees, the minimum pay) to which they are entitled under the legislation or under their contracts of employment, can bring actions for damages in the civil courts, or in the case of employees, employment tribunals (if the employment has already ended). Further advice can be obtained from county court offices, Citizens Advice Bureaux or a solicitor. Further information about how to make an application to an employment tribunal can be found in the explanatory leaflet Making a claim to an employment tribunal available from Jobcentre Plus offices, Citizens Advice Bureaux, from the DTI Publications Orderline on 0845 015 0010, or from the Employment Tribunals Service website.

New Legislation for resolving disputes in the workplace

From 1 October 2004, employers and employees will generally be required to follow a minimum process to ensure that workplace disputes are discussed, including one to be followed if an employee still has an outstanding grievance on leaving a job. In specified cases (which include complaints about notice and minimum pay), where an employer or employee is found not to have fully complied with these procedures, employment tribunals will normally impose financial penalties.

Detailed guidance, including information about the circumstances in which the procedures do not apply or are treated as having been followed, is available on the DTI website - Resolving Disputes (see related links). Further help and advice can be found on the Acas website and by contacting their helpline: 08457 47 47 47.

Right to receive a written statement of reasons for dismissal

The legislation gives most employees (with some exceptions - see Those who are not covered by the provisions relating to a written statement of reasons for dismissal, below) whose employment is terminated with or without notice, or whose limited-term contracts expire without being renewed, the right to receive from their employers, on request, a written statement of the reasons for dismissal or the non-renewal of their limited-term contracts. A limited-term contract is a contract for a fixed term or the performance of a specific task, or one which ends when a specified event does or does not occur. It is important to note that an employee who has been dismissed has no right to receive such a written statement unless he or she asks for one. The request can be oral or in writing. Employers are required to comply with an employee’s request for a written statement within 14 days of the request being made.

Employees dismissed at any time during pregnancy or statutory maternity or adoption leave are entitled to receive from their employer a written statement of the reasons for their dismissal, regardless of whether or not they have requested one, and regardless of their length of service.

The written statement can be used in evidence in any subsequent proceedings, for example in relation to a complaint of unfair dismissal.

Those who are not covered by the provisions relating to a written statement of reasons for dismissal

The right to a written statement of reasons for dismissal does not apply to:

  • anyone who is not an employee, for example an independent contractor or free-lance agent;
  • generally those who have not completed one year's continuous employment at the time of their effective date of termination (generally the last day on which the employee worked). For a fuller explanation of how to calculate the effective date of termination, see the document Unfairly dismissed?
  • masters and crew members engaged in share fishing who are paid solely by a share in the profits or gross earning of a fishing vessel;
  • members of the police service and the armed forces.

Making a complaint about a written statement of reasons for dismissal

If an employer refuses, or fails, to provide a written statement of the reasons for dismissal and the employee considers that the refusal or failure is unreasonable, the employee may complain to an employment tribunal. A complaint may also be made by an employee if given a statement which he or she considers to be inadequate or untrue.

An application form ET1, or ET1 (Scot) in Scotland, requesting the matter to be referred to an employment tribunal, is included in the explanatory leafletMaking a claim to an employment tribunal available from Jobcentre Plus offices, Citizens Advice Bureaux, from the DTI Publications Orderline on0845 015 0010or from the Employment Tribunals Service website. The employee must normally make the application within three months of dismissal, although this period may be extended by the tribunal if it is satisfied that it was not reasonably practicable for the time-limit to be met.

If an employee makes a complaint, a conciliator of the Advisory, Conciliation and Arbitration Service will be available to help the employee and the employer to try to reach a settlement without the need for a tribunal hearing. If, however, no settlement is reached and the tribunal, on hearing the complaint, decides that it is well founded, it will require the employer to pay the employee compensation equivalent to two weeks’ pay. It may also, if it thinks fit, make a declaration of what it finds to be the employer’s reasons for dismissing the employee.

The written statement of reasons for dismissal is not one of the cases in which employment tribunals can impose financial penalties for failure to follow statutory dispute resolution procedures - see related links.

Top

© Crown copyright 2008