What is Notice Period?
The notice period is the time period between the receipt of the letter of dismissal and the end of the last working day. This time period has to be given to an employee by his employer before his employment ends. It also refers to the period between the resignation date and the last working day in the company when an employee resigns. A notice period is the amount of time an employee has to give from the time he or she decides to quit until he/she actually stops working.
Types of Notice Period
There are 8 types of notice period – statutory notice, contractual notice, probationary notice, dismissal without notice or gross misconduct, payment in lieu of the notice period, fixed term contracts, redundancy notice, and withdrawing notice, and notice period for resignation.
1. Statutory notice period
When an employer terminates the employment contract, he is obligated to give the employee a notice period. The notice period depends on how long the employee had worked for the employer I.e., one week for one year, two weeks for two years, and so on.
2. Contractual notice period
This is the amount of notice expressed (oral/writing) in the contract of employment. The period is longer than a statutory notice period and cannot be shorter. The employer and employee may have to give different periods of notice depending on the contract.
3. Probationary notice
Probationary notice periods can range anywhere from one day to 3 months based on the hierarchy of the employee. Usually, they are shorter. However, there are two exceptions – before the serving of the notice period, the employment can be ended by compensating for the full notice period. Also, the employee may serve the notice period away from the workplace, without doing any work if they are joining a competitor. They are also paid for the full notice period.
4. Dismissal without notice (or) Gross misconduct and notice
If an employee is dismissed for their gross misconduct or behavior, they are terminated without being allowed to work or paid. If the behavior is alarming or serious enough, it could be a breach of contract.
5. Payment in lieu of notice (PILON)
In this type of notice period, the employee is paid for the full notice period but is told by the employer that they do not have to work. It may include payment for holiday entitlements, commission, and compensation for the loss of benefits. It is typically used to compensate for terminating the employee without notice or for breach of contract.
6. Fixed term contract
In a fixed term contract, the date of the last day of employment is stated. In such a case, no notice period is served. If the employer decides to terminate the employment contract before the stated date, the appropriate statutory notice is given.
7. Redundancy notice
When an employee is dismissed because his job no longer exists or is not required anymore, the employee is obligated to serve a notice period before his employment ends. The period for this notice period depends on how long the employee has worked I.e., one week for one year, 12 weeks for 12 years, and so on.
8. Withdrawing notice
When an employer or employee gives the notice, it is not possible to take it back unless both the parties agree to withdraw it.
9. Notice period for resignation
If an employee resigns, he must give at least one week’s notice. Depending on the contract, the notice period can be extended from up to one month. It may also vary according to the employee’s seniority level in the company.
What are the tasks an employee works on during the notice period?
- Complete all the pending tasks
- Share knowledge or skills with other colleagues
- Pay all dues within the company
- Submit all the company’s accessories like laptop, keys, ID, Books, etc
- Complete all release documentation process
Frequently Asked Question (FAQs)
Q1. What is a normal notice period?
A normal notice period is 1 to 2 months long. They are mostly determined by the employment contract and the law.
Q2. Can I refuse my notice period?
If the employment contract mentions a certain notice period, the employee is obligated to serve the notice period. If he doesn’t serve it, the employer might take legal action against the employee. However, the employee can negotiate the notice period to get compensated instead or avoid coming to work. Also, the employer cannot extend the notice period without consent.
Q3. Is a notice period necessary?
Notice periods ensure that an employee finishes all his unfinished projects and facilitates succession planning. It also helps employees look for another job and move on. The employee receives all that he is due (bonuses, holiday allowances, commissions, and salary). The employer will also look for a replacement and plan for the future of the work.