What is Notice Period? | Meaning & Definition | Akrivia HCM

What is the notice period?

A notice period is the length of time between an employee giving notice of their intention to leave and the day they officially depart. It also provides the employer time to conduct an exit interview, which is an opportunity to discuss the employee’s time with the company, including any feedback they may have.

Different types of notice period

• Statutory – A statutory notice period is the amount of time an employer is legally required to give an employee after the employee resigns. It can vary depending on the employment type and service length.
• Contractual – An employee must work for an employer for the length of time specified in a contract, known as the contractual notice period, after giving notice of their intention to resign.Generally, they range from one to three months but can be longer or shorter depending on the contract terms.
• Gross Misconduct – Gross misconduct is a serious offense and usually results in immediate dismissal without notice.
• Fixed term contract – A fixed-term contract is an employment agreement with a specified end date. The notice period for a fixed-term contract is the amount of time the employer and employee must give prior to the contract’s end date.

Importance of notice period

A notice period is an important part of any employment contract as it provides both the employer and the employee with a period of time to make necessary arrangements. For the employer, a notice period provides time to arrange for another employee to fill the role, while for the employee, it provides them with the necessary time to find a new job. It also helps maintain good relations between the two parties, allowing them to part on good terms.

How long is the notice period?

The amount of notice required is usually specified in an employment contract given during onboarding and can range from several weeks to a few months, depending on the situation. Generally, employers must provide their employees a reasonable amount of notice before terminating their employment, which is typically at least two weeks. The length of the period may also be affected by the type of job. For example, jobs requiring specialized skills or knowledge may require a longer notice period than others. It is important to read the contract thoroughly to understand the notice period requirements and any associated penalties for not providing the correct notice. 

What is the notice period process?

• Notification: The employee must first give written notice to their employer that they intend to leave their position. 
• Negotiation: After the initial notification, the employer and the employee should negotiate the terms of the notice period. This includes the length of the period, the conditions of notice, and any other relevant details. 
• Agreement: After both parties have come to an agreement, they should put the terms of their agreement in writing and sign it. This document should include the terms of the notice period and any other details that both parties have agreed to.
• Completion of Notice Period: The employee should complete the agreed-upon notice period. 
• Exit Documentation: The employer should provide the employee with all necessary exit documentation. 
• Final Payment: After completing the notice period, the employer should provide the employee with their final payment. This payment should include all the wages, benefits, and other compensation the employee was entitled to during the notice period.

How can the Notice Period be implemented?

• Set a standard notice period: Establish a standard notice period that applies for all employees. This should be based on the job role, seniority level, and other factors. 
• Make it clear: Make sure all employees are aware of the notice period policy and the consequences of not honouring it. 
• Be flexible: Depending on the circumstances, be open to making exceptions to the notice period. This can help to maintain good relationships with departing employees. 
• Put it in writing: Ensure that the notice period is clearly outlined in the employee’s contract and that they sign it. 
• Follow through on the policy: If an employee fails to give the required notice, it is important to follow through with the consequences outlined in the policy. This will ensure that employees are aware of the policy and take it seriously.

Pay in lieu meaning

Pay in lieu of notice is an arrangement where an employer pays an employee for their notice period without requiring them to work for the duration of the period. 

Example – You can leave immediately, and I hereby give you the pay in lieu of your notice period. This payment will be equal to the salary you would have received if you had worked during your notice period. 

Garden leave definition

Garden leave is a contractual agreement between an employer and an employee stipulating that the employee will remain away from work  during the notice period. During this period, the employee is usually still paid their salary but is not allowed to take on any other work. 

What is buy out notice period option?

A buy-out notice period option is a way of ending an employment contract before the notice period is complete. This means the employee can leave their current job immediately in exchange for a financial payment. It is typically done when an employee needs to leave their job quickly, such as when they have accepted a new job or are relocating for personal reasons.  

Can we take leave during the notice period?

Yes, you can take leave during the notice period only when you are sick or if there is any death of a family member or relative.