The Importance of Fair and Appropriate Notice Periods in Employment Contracts
Darryl Horn, Wednesday, 26 April 2023 • 3 min read
Getting Notice Periods Right: Why They Might Be Different for Different Levels of Seniority, and What Organisations Can Do to Update Them
Notice periods are a critical aspect of employment contracts, providing both employers and employees with a degree of certainty and protection when it comes to terminating employment. However, the appropriate notice period will depend on various factors, including the level of seniority of the employee, the nature of the job role, and the size and industry of the organisation.
One of the main reasons why notice periods might be different for employees at different levels of seniority is the complexity and importance of their roles. According to a 2016 survey by XpertHR, the median notice period for senior managers in the UK was 3 months, while for directors it was 6 months. This is because senior executives often have a significant impact on the direction and success of the organisation, and their departure could have far-reaching consequences.
In contrast, employees at lower levels of seniority may have less of an impact on the organisation as a whole, and their departure may be easier to manage. The same survey found that the median notice period for all employee categories in the UK was 1 month, indicating that notice periods can vary widely depending on the level of seniority.
It is also worth noting that notice periods can vary widely depending on the industry and size of the organisation. Smaller organisations may have shorter notice periods than larger ones, as they may be more agile and able to respond to changes in staffing more quickly. Similarly, organisations in certain industries, such as fast-paced retail or hospitality, may require shorter notice periods due to the transient nature of the workforce.
Despite these differences, it is essential for organisations to get notice periods right. A fair and appropriate notice period can help to ensure that employees are treated fairly and that the organisation is able to manage staffing changes effectively. On the other hand, getting notice periods wrong can lead to legal disputes, reputational damage, and financial costs.
If an organisation wishes to update its notice periods, there are several steps that it can take. First, it should review its existing employment contracts and policies to understand the current notice periods and any relevant legal requirements. It may also be helpful to consult with legal or HR professionals to ensure that any changes comply with relevant laws and regulations.
Once the organisation has a clear understanding of its current notice periods and any necessary changes, it should communicate these changes clearly to its employees. This can help to ensure that everyone is on the same page and that there are no misunderstandings or disputes later on.
In conclusion, notice periods are a crucial aspect of employment contracts, and getting them right is essential for both employers and employees. By taking into account factors such as seniority, job role, industry, and size, organisations can ensure that their notice periods are fair, appropriate, and effective in managing staffing changes.
- XpertHR 2016 Notice Period Benchmarking Survey
- Acas: Notice Periods
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This article was first published on 26/4/23.