When an employee refuses to work their notice period on resignation, this can cause operational issues for their employer. Even when this does not leave the employer’s business short-staffed or without anyone to hand over to that person’s replacement, it is still important for an employer to understand the implications of any refusal to work notice, for example, the impact on an employee’s pay.
In many cases, the employer will also want to know what legal action, if any, can be taken against the employee in response to their refusal to work out their notice, not least where the employee is especially senior or highly skilled.
In this guide for employers, we explain the law on notice periods, in particular an employee’s refusal to work notice. We also look at the ways, where appropriate, in which any acceptable compromise can be reached, as well as how to minimise the risk of employees not working notice periods moving forward.
Do employees have to work notice periods?
As a matter of law, where required to do so by their employers, all employees must work out their notice period if they resign. This is because employees are contractually bound to work up until the last day of their contract of employment, provided they want to get paid for that period, regardless of whether or not their contract is in writing. The real question is how much notice the employee will be required to give to their employer having handed in their resignation; this is usually stipulated within an express contractual term.
In the event there is no such written term, the statutory notice period for an employee on resignation is just one week. This will be the case for all employees who have been working for their employer for one month or more, and even if an employee is still within their probation period at the time that they notify their employer of their decision to leave. However, any written employment contract will usually make provision for longer notice, typically at least one month, although for senior and other key employees this can be for several months.
In essence, where there is provision within a signed employment contract for a specific notice period to be worked by an employee, they will be contractually bound to comply with that term. In many cases, the contract will also include a provision for pay in lieu of notice (PILON). A PILON clause is used to end the employment relationship with immediate effect. However, a PILON clause will almost always be at the discretion of the employer. For example, this type of clause will be used by an employer to prohibit an employee from returning to the workplace, and having access to client lists and other confidential data, where the employer suspects that the employee may be leaving to work for a competitor.
Alternatively, the contract of employment may include what is known as a garden leave clause, under which an employee is effectively suspended on full pay during some or all of their notice period, although they are still technically employed. This is another protective measure used by employers, where garden leave will not only keep the employee away from the business, but prevent them from starting work for a competitor straight away.
Do employers have to pay employees for not working notice periods?
There are various scenarios in which an employee may decide that they do not want to work out their notice period, many of which are entirely understandable. For example, an employee may have the offer of another job, possibly on better pay and conditions, but with an immediate start date. The employee may also feel uncomfortable working out their notice having made a decision to leave an organisation. In some cases, this could even be because the reason for their resignation is linked to complaints with their working conditions and/or the type of work undertaken, or job dissatisfaction in general.
Whatever the reason for an employee’s decision to resign, they are bound to work out the minimum notice period as required by law, provided they want to get paid for this. Essentially, this means that as long as the employer has not breached the employee’s contract of employment, they do not have to pay the employee for any unworked notice, but they will be contractually obliged to pay the employee up until the last day worked.
The only exception to this rule is where an employee feels forced to resign because of a fundamental breach of contract on the part of the employer. This could be where there has been a breach of the implied term of mutual trust and confidence between the parties, such that this has caused irreparable damage to the employment relationship. For example, if an employee has made ongoing complaints of bullying or harassment by co-workers, and the employer has failed to take all reasonable steps to put a stop to this unwanted behaviour, the employee may be able to forcibly resign and claim for constructive dismissal.
In these circumstances, the employer would not only be liable to pay the employee for any unworked notice period, but could also be required by a tribunal to pay damages for any continued loss of employment.
What legal action can be taken for not working notice periods?
Any refusal on the part of an employee to work out their notice period can cause serious operational issues for a business, from short-term staffing problems to failing to meet important client contracts, not least where an employee is especially senior or skilled.
To suddenly lose the skillset and/or experience of even a single member of staff can often have a significant impact on a business, where employers will want to know where they stand, legally speaking, if an employee refuses to work their notice where required to do so. In some cases, an employer may even want to take legal action against an employee if the financial impact of them not working their notice is damaging, for example, where this has resulted in costly emergency cover or even the loss of an important contract.
However, bringing a breach of contract claim against employees not working notice periods is not necessarily straightforward. It will not be sufficient for an employer to simply show that the employee resigned without working the required notice. The employer must also be able to demonstrate a causal connection between the employee’s refusal and any financial loss suffered by the business because of that, not to mention being able to demonstrate to the court that attempts were made by the employer to mitigate those losses. As such, suing an employee for breach of contract is only ever an option of last resort.
It is also important to bear in mind that any legal action taken against an employee will usually be after the event, once any financial loss has already been suffered. In theory, an employer could apply to the court for injunctive relief, to force an employee to work out their notice. However, unless an employee is in a senior or key role, this would not be a cost-effective way of addressing the problem and the courts are usually reluctant to force an employee to work out their notice period in any event. Forcing someone to work against their express wishes is also likely to be counter-productive where, at best, they may be distracted, at worst, they may deliberately attempt to sabotage the business in some way.
Negotiating out of the notice period
When it comes to employees not working notice periods, entering into negotiations can often be the most effective tool at the employer’s disposal, with any alleged breach of contract acting as leverage to persuade an employee to consider a compromise.
In most cases, seeking to persuade an employee to work at least part of their notice period, and finding some middle ground with that person, will be in the best interests of both parties. In this way, the employer will be avoiding any significant loss resulting from the employee leaving with immediate effect. Equally, the employee will be avoiding the threat of court proceedings, with all of the litigation and costs risks that can flow from this.
However, if agreement can be reached between an employer and employee, it is important that this be clearly recorded in writing and signed by both parties. In this way, the employer can avoid any allegations of unpaid wages for the totality of the notice period, whilst the employee can avoid the threat of legal proceedings for alleged breach of contract.
How can the risk of not working notice periods be minimised?
There are various ways in which an employer can help to minimise the risk of employees not working notice periods, where much will be down to carefully worded employment contracts, comprehensive onboarding procedures and, where needed, compromise.
The employment contract
From the outset of the employment cycle, it is important to ensure that any contractual notice provisions are tailored to the nature and significance of the job role, as well as the level of seniority of an employee. In most cases, for employees in relatively junior or easily replaceable roles, any notice period should not be too onerous, certainly no more than one to three months maximum. If the notice period is too long, the risk of incidence of employees not working notice periods is likely to increase. In contrast, the more senior or skilled an employee, the longer the notice period, in some cases as much as three to six months, although care should still be taken not to make notice periods too long, so as not to deter top talent from wanting to work for the business in the first place.
It is also possible for the employer to include a contractual provision that will deter an employee from leaving without notice, such as the right to withhold any final payments. This can be a little tricky to get right, as any such clause must reflect a true estimate of the employer’s financial loss, such as to cover the cost to hire a temporary replacement, and is not a clause purely designed to penalise the employee. By getting this wrong, the employer may find themselves defending a claim for unlawful deduction from wages.
However, perhaps the most important thing when it comes to contractual notice provisions, is to ensure that these are clearly worded and easy for the employee to understand, where hard-to-read contracts will only cause confusion. The contract should also make clear that any employee who chooses not to work their notice will not be paid for that period.
The onboarding process
At the point at which employees are asked to sign their contract of employment, it can be a useful exercise to create an additional document highlighting the required notice period for the employee in question, and asking that individual to acknowledge their obligations when it comes to notice on resignation. In this way, attention can be specifically drawn to the employee’s contractual obligations if they choose to leave, reinforcing the need for them to meet these obligations and understand the potential consequences of failing to do so.
However, this onboarding exercise is not about implicit threats of legal action for breach of contract, although it is important to remind an employee that an employment contract is legally enforceable. Instead, it is more about explaining how meeting notice periods is often an operational necessity, rather than a punishment, whilst also letting the employee know that, in exceptional circumstances, that period may be waived at the employer’s discretion.
This way, an employee is more likely to approach the employer about any resignation dilemma, for example, if they have found a new job with a short start date, where some middle ground may be found to keep everyone happy. By offering some level of understanding, employees are less likely to just up and leave, but rather address the matter with their employer in a more mutually respectful and rational way.
The ability to compromise
Even if an onboarding agreement is signed around notice periods, it is important for employers to remain open to the possibility that when an employee resigns, they may need some level of compromise. If this is the case, it is important to be open to negotiating some form of agreement, where some or all of their notice period is waived.
By asking the employee to explain their reasons for wanting to leave immediately, or to not work their notice period in full, rather than threatening legal proceedings, this can often provide a solid basis upon which agreement can be reached on acceptable terms. The promise of a good reference can also go a long way to persuading an employee to agree.
DavidsonMorris are UK employment law specialists. We work with employers to provide guidance across aspects of workforce management and dispute resolution, including advice on notice periods, contract terminations and exits. Through our fixed-fee employment law service, Triple A, you can access unlimited employment law advice from a dedicated lawyer to support legal risk management and best practice. Contact us for more information.
Employee not working notice period FAQs
What happens if I don't work my notice period?
If an employee doesn’t work their notice period as required under their employment contract, the employer may be able to claim damages through the courts for breach of contract, for example, for the cost of any emergency temporary cover.
Do you legally have to work a notice period?
By law, having signed an employment contract requiring you to work a certain notice period on resignation, you are legally required to do so. However, absent any written term, the statutory notice period is usually just one week.
Last updated: 11 November 2022