Statutory vs contractual notice periods in the UK: what are your rights?

Statutory notice is the minimum period of notice required by law. Contractual notice is the period agreed between an employer and employee, usually through an employment contract.

In the UK, your notice entitlement depends on whether you are resigning or being dismissed, how long you have worked for your employer and what your employment contract says.

If you are dismissed, your employer must normally provide whichever is longer: your statutory notice entitlement or the notice promised in your contract.

If you resign, you must normally give at least one week's notice after one month's employment, unless your contract requires more.

There are exceptions, particularly where employment ends because of gross misconduct or a serious breach of contract.

Understanding these differences is important because an incorrect notice period can lead to lost earnings, contractual disputes and potentially legal claims.

What is a notice period?

A notice period is the time between an employee or employer communicating that employment will end and the employment actually ending.

Notice periods serve two purposes.

For employers, they provide time to manage the departure, arrange cover, recruit a replacement and transfer responsibilities.

For employees, they provide a degree of financial security and an opportunity to prepare for their next role.

A notice period may apply when someone:

• Resigns voluntarily.
• Is dismissed for performance or conduct reasons.
• Is made redundant.
• Leaves employment during a probation period.
• Agrees to end employment through a negotiated arrangement.

However, the amount of notice required depends on the circumstances.

An important distinction is that statutory minimum notice rights generally apply to people with the legal employment status of employee. Other workers, including some casual and agency workers, may have different contractual arrangements.

What is statutory notice?

Statutory notice is the minimum period established by employment legislation.

In Great Britain, the Employment Rights Act 1996 sets out minimum notice requirements for employees.

The law treats notice given by employers differently from notice given by employees.

Statutory notice when an employer dismisses an employee

The minimum notice an employer must normally give depends on the employee's continuous service.

Between two and twelve years of service, the minimum increases by one week for each complete year of continuous employment.

The maximum statutory notice period is twelve weeks.

Example

An employee has worked for the same employer for seven years and eight months.

Their statutory notice entitlement is seven weeks.

The additional eight months do not increase the statutory minimum because the calculation uses complete years of service.

If the employee's contract promises three months' notice, the longer contractual notice would normally apply instead.

Statutory notice when an employee resigns

The statutory minimum notice an employee must normally give is much simpler.

Once an employee has completed at least one month of continuous employment, they must generally provide at least one week's notice.

Unlike an employer's statutory notice obligation, the employee's statutory minimum does not increase with length of service.

For example, an employee with ten years of service who has no longer contractual notice obligation would generally need to give only one week's notice when resigning.

However, many employment contracts require a longer period.

What is contractual notice?

Contractual notice is the period agreed between the employer and employee.

It is usually specified in the employment contract or written statement of employment particulars.

Common contractual notice periods include:

• One week during probation.
• One month for operational or administrative roles.
• Two or three months for management positions.
• Six months for some senior leadership positions.

These are examples rather than legal requirements.

An employer may agree to provide a longer notice period than the statutory minimum, but cannot ordinarily use contractual wording to reduce an employee's statutory entitlement when dismissing them.

Similarly, an employee may agree to provide more than the statutory minimum notice when resigning.

Can contractual notice be different for employers and employees?

Yes.

An employment contract might require an employee to provide one month's notice when resigning, while requiring the employer to provide three months' notice when dismissing them.

There is no general requirement for both notice periods to be identical.

However, contractual terms remain subject to applicable employment law, and employers must still observe statutory minimum notice requirements.

Workplace example: your contract says one month, but you've worked for eight years

Imagine Daniel has worked for an organisation for eight years.

His contract states that either party must provide one month's notice.

The employer decides to dismiss Daniel because of a restructure.

His contractual notice period is approximately four weeks, but his statutory entitlement is eight weeks.

Daniel must normally receive at least eight weeks' notice, because the statutory entitlement is longer.

The employer cannot rely on the shorter contractual term to reduce his legal entitlement.

If the organisation wants Daniel to leave immediately, it must consider whether payment in lieu of notice is contractually permitted or otherwise agreed.

This is an example of why employers should review statutory entitlement rather than relying exclusively on the contract.

Can an employer make you work your full notice period?

Generally, employees are expected to comply with their contractual notice obligations unless a lawful exception applies or both parties agree an alternative arrangement.

An employer can normally require an employee to work during their notice period.

For example, if an employee has a three-month contractual notice period, the employer may expect them to continue working for those three months.

However, employees and employers can agree to shorten the period.

This might happen where:

• The employee has secured another position.
• A replacement has already been recruited.
• The organisation no longer requires the employee's services.
• Both parties agree an earlier departure is appropriate.

If an employee wishes to leave earlier, it is sensible to request agreement in writing.

An employer cannot physically compel someone to work, but leaving without meeting contractual obligations can create legal and financial consequences.

Can you leave a job without working your notice?

Potentially, but the circumstances matter.

There are several situations where an employee might leave without completing their normal notice period.

1. Your employer agrees to release you early

This is usually the simplest arrangement.

An employee asks to leave before their notice period ends, and the employer agrees.

Both parties should confirm the revised employment end date and any financial implications in writing.

2. Your employer offers payment in lieu of notice

The employer may end employment immediately and provide an appropriate payment instead of requiring the employee to work their notice.

The legal position depends on contractual terms and any agreement reached.

3. Your employer has seriously breached your contract

Where an employer has committed a sufficiently serious contractual breach, an employee may be entitled to resign without working their normal notice.

Such circumstances can arise in potential constructive dismissal cases.

However, this is legally complex.

An employee considering resignation because of an employer's conduct should seek specialist advice before taking action, as the decision can have important consequences for any subsequent claim.

4. You leave without agreement

If you resign and leave before completing your required notice without agreement or another lawful justification, you may be in breach of contract.

An employer might seek to recover additional losses caused by that breach, subject to legal requirements.

However, leaving without notice does not mean that an employer can automatically withhold all outstanding wages.

Employees remain entitled to payment for work already completed, subject to lawful deductions, and payment for accrued but untaken statutory holiday.

What happens if you refuse to work your notice period?

Consider this situation.

A project manager has a contractual notice period of three months.

They accept a new job and tell their employer they will be leaving after two weeks.

Their employer refuses to release them early.

If the employee nevertheless leaves, they may breach their employment contract.

The organisation might incur additional costs arranging temporary cover.

Depending on the contract and the circumstances, the employer could consider legal action to recover losses caused by the breach.

However, the employer would need an appropriate legal basis and evidence of recoverable loss.

Employers cannot simply impose arbitrary financial penalties because an employee has resigned.

The better approach is usually to discuss a mutually acceptable departure arrangement, including handover responsibilities and the proposed end date.

What is payment in lieu of notice (PILON)?

Payment in lieu of notice, commonly called PILON, is an arrangement where an employee receives payment instead of working some or all of their notice period.

For example, an employee earns £3,000 per month and has a contractual notice period of three months.

Their employer decides to terminate their employment immediately under a valid contractual PILON clause.

A simple salary-based calculation would be:

£3,000 × 3 months = £9,000 gross

However, the actual calculation depends on the contract, remuneration arrangements and applicable law.

Bonuses, commission, benefits and other entitlements may also need to be considered.

Does your employer need your permission to pay PILON?

If the employment contract contains a valid PILON clause, the employer may be entitled to use it in accordance with that clause.

If there is no such clause, the employer can seek agreement with the employee.

Imposing immediate termination without contractual authority or agreement can create a risk of wrongful dismissal or breach of contract.

Does PILON end your employment immediately?

Usually, yes.

Under a PILON arrangement, employment generally ends on the agreed termination date, rather than continuing throughout the period represented by the payment.

This can affect contractual benefits, holiday accrual and other employment rights.

That makes it important to understand the difference between PILON and garden leave.

What is garden leave?

Garden leave is when an employee remains employed during their notice period but is instructed not to perform some or all of their normal duties.

An employer might use garden leave when an employee:

• Has access to sensitive commercial information.
• Is moving to a competing organisation.
• Holds a senior position.
• Is involved in commercially sensitive projects.
• Is no longer required to perform day-to-day duties during the handover period.

During garden leave, the employee remains employed.

They normally continue receiving contractual pay and benefits, remain subject to relevant contractual obligations and are generally not free to begin another job that conflicts with their existing employment.

Garden leave vs PILON: what's the difference?

Example

An employee resigns with three months' notice.

Their employer places them on garden leave for the entire period.

They remain employed for three months and receive their normal pay and benefits.

If the employer instead exercises a valid PILON clause, employment may end immediately, with payment made for the notice period.

Although the financial outcome may appear similar, the employment and contractual consequences can be very different.

Do you get paid during your notice period?

Employees must normally receive their usual pay for work performed during their notice period.

However, notice pay becomes more complicated when an employee is not working because of sickness, family-related leave or other circumstances.

The amount payable can depend on:

• Whether the employee resigned or was dismissed.
• Their statutory notice entitlement.
• The length of their contractual notice.
• Their normal pay arrangements.
• The type of absence involved.

For example, an employee dismissed while on sick leave may be entitled to full normal notice pay in some circumstances.

In other circumstances, their entitlement may depend on statutory or contractual sick pay.

Acas explains that a particularly important distinction is whether the contractual notice period exceeds statutory notice by at least one week.

This means that employees should not automatically assume they will receive their normal full salary throughout notice while absent from work.

Managers should calculate notice pay carefully rather than treating all absences in the same way.

Can you take annual leave during your notice period?

Yes, subject to the usual rules governing annual leave and applicable contractual arrangements.

An employee may request to use accrued annual leave during their notice period.

The employer may approve or refuse particular dates in accordance with the applicable rules.

Employers may also require employees to take annual leave during notice, provided the appropriate legal notice requirements are met, unless a relevant agreement provides otherwise.

If employment ends and the employee has accrued but untaken statutory holiday, the employer must normally pay for that entitlement.

Workplace example: unused holiday when leaving

Imagine an employee has accrued 12 days of annual leave by their departure date.

They have already taken seven days.

Their remaining accrued entitlement is:

12 − 7 = 5 days

If those five days remain unused when employment ends, the employee would normally be entitled to five days' holiday pay, assuming these are part of their statutory entitlement.

The employer should use the applicable holiday pay calculation rather than assuming that every employee's daily rate is identical.

Where an employee has taken more holiday than they have accrued, an employer may be able to make a deduction if this was agreed in the contract or otherwise agreed in writing beforehand.

Do notice periods apply during probation?

Yes.

Being on probation does not automatically remove notice obligations.

For employees who have completed at least one month of continuous service, statutory minimum notice requirements generally apply.

However, employment contracts frequently provide a shorter contractual notice period during probation than after successful completion.

For example:

• During probation: One week's notice.
• After probation: One month's notice.

If an employer dismisses an employee after five months of employment, they would normally need to provide at least the applicable statutory minimum of one week, even if the probationary contract states a shorter period.

Where a longer contractual entitlement applies, the employer must normally observe that instead.

It is also important to distinguish notice rights from unfair dismissal rights.

An employee may have a legal entitlement to notice even where they do not yet qualify for an ordinary unfair dismissal claim.

What changes in January 2027?

The Employment Rights Act 2025 introduces significant changes to unfair dismissal protection in Great Britain.

From 1 January 2027, the qualifying period for ordinary unfair dismissal protection will reduce from two years to six months.

However, the reform does not change the statutory minimum notice periods.

This means an employee with six months of continuous employment may acquire ordinary unfair dismissal protection from January 2027, while their statutory minimum employer notice entitlement remains one week.

Notice periods and unfair dismissal rights are separate legal concepts.

For employers, the change reinforces the importance of reviewing probation, performance management and dismissal procedures.

For employees, it means a relatively short notice entitlement does not necessarily indicate limited protection against unfair dismissal.

Can your employer change your notice period?

An employer may propose changing contractual notice arrangements, but it cannot ordinarily impose a contractual change simply because it prefers different terms.

Employment contracts can generally be changed through agreement or another lawful mechanism.

For example, an organisation might want to increase notice periods for senior managers from one month to three months.

It should consult affected employees, explain the proposed changes and seek agreement.

Unilateral changes can create contractual and employment law risks.

Employers should also take care where an existing contract contains variation clauses, as the existence of such a clause does not automatically make every proposed change lawful.

What happens if your employer gives you too little notice?

If an employer dismisses an employee without providing the notice required by law or contract, the employee may have a claim for wrongful dismissal or breach of contract.

For example, an employee has a contractual entitlement to three months' notice.

Their employer dismisses them immediately, without a valid PILON provision, agreement or other lawful justification.

The employee may be entitled to pursue a claim for financial losses arising from the failure to provide proper notice.

Wrongful dismissal is different from unfair dismissal.

A wrongful dismissal claim focuses on whether contractual obligations, including notice requirements, were breached.

An unfair dismissal claim focuses on whether the dismissal was legally fair.

Employees do not generally need two years of service to bring a wrongful dismissal claim based on breach of contract.

Legal advice may be appropriate where the circumstances are disputed.

What should managers do when an employee resigns?

Resignations are a routine part of working life, but poorly managed departures can create unnecessary disruption and conflict.

Managers should take a structured approach.

Confirm the resignation. Establish the employee's intended final working day and applicable notice obligations.

Review the contract. Check both the employee's and employer's notice requirements and any relevant provisions concerning PILON or garden leave.

Discuss the handover. Identify responsibilities, outstanding work and essential knowledge that needs transferring.

Consider flexibility. Where an employee requests early release, assess whether a mutually acceptable arrangement is possible.

Calculate final entitlements. Ensure outstanding salary, accrued holiday and any other relevant payments are handled correctly.

Communicate professionally. An employee leaving the organisation should not automatically be treated as disloyal or uncommitted.

In our experience, the way an organisation handles departures can reveal a great deal about its workplace culture.

An employee who resigns professionally should be able to expect a professional response.

Equally, employees should recognise the operational implications of their departure and fulfil reasonable contractual obligations.

Frequently asked questions

Can i resign with immediate effect?

You can communicate an immediate resignation, but leaving without completing your notice may breach your contract unless an exception applies or your employer agrees.

Can my employer refuse my resignation?

An employer cannot generally force an employee to remain employed indefinitely. However, the employee must normally comply with applicable contractual notice obligations.

Is one month's notice the same as four weeks?

Not necessarily. One calendar month and four weeks can produce different end dates. The precise contractual wording matters.

Can my employer make me work three months' notice?

If your contract lawfully requires three months' notice, your employer can normally expect you to comply unless an alternative is agreed or another lawful exception applies.

Do i get paid if i'm placed on garden leave?

Yes. Employees placed on garden leave normally continue receiving their usual contractual pay and benefits during the notice period.

Can i start a new job while on garden leave?

Not necessarily. You remain employed during garden leave and must comply with your existing contractual obligations. Starting another role may require your employer's agreement.

Can i go off sick during my notice period?

Yes. Employees can take genuine sick leave during notice, subject to normal sickness reporting procedures. Notice pay depends on their circumstances and contractual arrangements.

Can my employer refuse to pay unused holiday when i leave?

Employers must normally pay for accrued but untaken statutory holiday when employment ends. Additional contractual holiday may be subject to different terms.

Can i be dismissed without notice for poor performance?

Ordinary poor performance does not automatically justify dismissal without notice. Summary dismissal is generally associated with sufficiently serious misconduct or another legally recognised justification.

Do you have to give notice on a zero-hours contract?

The answer depends on your legal employment status and contractual terms. Not everyone described as being on a zero-hours contract has the same employment rights.

Can my employer deduct money because i left without notice?

Potentially, but deductions must have a lawful basis. An employer cannot simply withhold wages arbitrarily. Contractual provisions, evidence of losses and applicable wage protection rules all matter.

Final thoughts: notice periods should provide clarity, not conflict

Notice periods are intended to create a reasonable transition between employment and departure.

They protect organisations from sudden operational disruption and provide employees with important contractual and financial certainty.

Yet misunderstandings remain common.

Some employees assume their statutory notice automatically increases with their length of service, regardless of whether they are resigning or being dismissed.

Others assume they can leave immediately once they have accepted another job.

Meanwhile, employers sometimes overlook longer contractual obligations, misunderstand payment in lieu of notice or fail to distinguish garden leave from immediate termination.

These mistakes are often avoidable.

Clear contracts, transparent communication and accurate calculations are essential.

But so is professional judgement.

An employee leaving an organisation is not necessarily a problem to be managed. It is often simply part of a normal professional career.

Good employers don't measure loyalty by how difficult they make it for someone to leave. They demonstrate professionalism by managing departures fairly, respectfully and in accordance with the law.

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Sources and further reading

• Acas: Notice periods
• Acas: Notice when resigning
• Acas: Notice when being dismissed or made redundant
• Acas: Payment in lieu of notice and garden leave
• Acas: Pay during the notice period
• Acas: Holidays and final pay
• GOV.UK: Handing in your notice
• GOV.UK: Dismissal rights
• GOV.UK: Employment Rights Act 2025 implementation timeline

This article provides general information about employment law in England, Scotland and Wales. Northern Ireland has separate employment legislation. The information is not a substitute for individual legal advice. Employment rights depend on legal employment status, contractual provisions and individual circumstances.