Notice Period Rules for Small Employers UK (2025)
Understanding notice periods is crucial for small employers. Here's what you legally must provide and how to set fair notice periods in employment contracts.
Statutory Minimum Notice Periods
UK law sets minimum notice periods that apply to all employees:
- Less than 1 month service: No statutory notice required
- 1 month to 2 years: 1 week minimum
- 2+ years: 1 week per year of service (max 12 weeks)
What Small Employers Need to Know
As a small employer, you can set contractual notice periods longer than the statutory minimum, but never shorter. Here's what works for most small businesses:
Junior Roles
1 Week
Entry-level positions, admin staff, junior roles
Standard Roles
1 Month
Most professional roles, skilled positions
Senior Roles
3 Months
Management, directors, specialized positions
Employee vs Employer Notice
Notice periods don't have to be the same for both parties. It's common (and legal) to have asymmetric notice:
Common Asymmetric Example:
Employee gives:
1 Month
Employer gives:
2 Months
This protects employees while giving employers flexibility to recruit talent
Notice During Probation
Many small employers use shorter notice periods during probation to provide flexibility while assessing new hires:
Typical Probation Notice:
- →First month: 1 day or 1 week (good practice even though not legally required)
- →During probation: 1 week for both parties
- →After probation: Standard contractual notice (e.g., 1 month)
Common Mistakes Small Employers Make
❌ Setting notice below statutory minimum
If you set 1 week notice but the employee has 3 years service, they're automatically entitled to 3 weeks statutory notice regardless of the contract.
❌ Not specifying notice in the contract
If you don't state notice periods, statutory minimums apply, which may not give you enough time to recruit replacements.
❌ Making notice too long
6-month notice periods might deter good candidates. Keep it reasonable for the role level.
Payment in Lieu of Notice (PILON)
Small employers often want the option to pay employees instead of making them work their notice. To do this legally, you must include a PILON clause in the contract.
What to Include:
"The Employer reserves the right to terminate employment with immediate effect by making a payment in lieu of notice equal to the Employee's basic salary for the notice period."
Garden Leave
Garden leave means paying the employee their full salary during the notice period but not requiring them to work. This is useful when:
- The employee is moving to a competitor
- You want to protect client relationships or confidential information
- The employment relationship has broken down
Important: You need an explicit garden leave clause in the contract to do this legally. Without it, employees have a right to work during their notice period.
Get Notice Periods Right
Our contract generator includes customizable notice periods for probation and post-probation, with optional PILON and garden leave clauses.
Create Contract with Notice Clauses