There are statutory provisions relating to notice that will apply where there are no contractual notice provisions specified but there are a number of reasons why it is preferable to have a detailed notice clause in the contract of employment.

Length of notice

Statutory notice is specified by Article 118 of the Employment Rights (NI) Order 1996 (ERO) as being a minimum of one week in the first 2 years of employment, with an additional week’s notice for each complete year of service up to a ceiling of 12 weeks’ notice. A contractual term may provide for additional notice to be given by either party but any term reducing the notice requirement of the employer will not be enforceable.

A notice clause can also specify that a different period of notice applies during the probationary period.

Must notice always be given?

The parties can agree to waive notice requirements. A contract does not have to specify this but a term in the contract will provide clarity for both parties.  Where either employee or employer fails to provide sufficient or any notice this will be a breach of contract. The employer can enforce the notice period by obtaining an injunction or, in the alternative, alternative bring proceedings for damages. This is a difficult claim to succeed in as the employer will have to prove that it suffered a loss as a result of the employee’s failure to work their notice. If an employer fails to give proper notice the employee can bring a claim for wrongful dismissal or unlawful deduction of wages.

Notice need not be given at the expiry of a fixed term contract. However, since the expiry of a fixed term contract amounts to a dismissal, the employer should still follow statutory dismissal procedures. A fixed term contract should still include a clause regarding notice in the event of termination prior to the expiry of the specified term.

A notice clause should specify the circumstances in which notice will not be given and this may be cross-referenced to any disciplinary procedure specifying the circumstances in which an employee may be summarily dismissed for gross misconduct.

Notice pay

An employee will be entitled to be paid in the usual way if they work during their notice period. Additionally, the ERO specifies that an employee is entitled to be paid during any period of notice where they are ready and willing to work except in cases of sickness, holiday, maternity or other family leave. This means that employees should be paid during periods of sickness, maternity or other family leave and holiday. There is an exception to this set out at Article 119(4). Notice pay does not have to be paid where the employee is not working during that period and the contractual notice is at least one week more than the statutory notice. However, this is controversial in cases where the employee is on family leave and employers should proceed with caution. The case of Meerts v Proost NV (Case C-116/08) [2009] ECR I-10063 suggests that employees should be paid notice pay while on family leave as otherwise it may dissuade people from using the leave and employers would find it easier to dismiss people on family leave than other employees.

However, a notice clause can provide that the employer may pay in lieu of notice and can and should specify what benefits are payable as part of the payment. There is no implied right to pay in lieu of notice and so this must be expressly set out in the clause.

Other specifications

The notice clause should also specify that the employer may require the employee to use holidays during the notice period.  This will allow the employer the option of reducing the amount of payment for accrued holiday at the end of the contract.

A notice clause should also specify how the employer expects to give and receive notice (usually in writing) and where to whom any notice should be provided.

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NOTE: Kiera Lee is speaking at Legal-Island's Contracts for the Modern Employment Relationship event on 17th May at the Merchant Hotel, Belfast.