Notice Period in the UK: Rules & What Is Changing in 2027

The UK notice period system is straightforward compared to most of continental Europe, and that is precisely why it trips people up. The rules are simple enough that most employers think they understand them. Then they get caught out by the interaction between statutory and contractual notice, the rules around pay during notice, or the fact that notice periods now matter much more because of the Employment Rights Act 2025, which reduces the unfair dismissal qualifying period from two years to six months starting January 2027.

Here is the short version: if an employer wants to dismiss someone, the statutory minimum notice is 1 week for the first two years, then 1 additional week for each year of service, capped at 12 weeks. If an employee wants to resign, the statutory minimum is always 1 week (regardless of how long they have worked there). Most employment contracts override these minimums with longer periods, typically 1 to 3 months for professional roles.

This guide covers the statutory notice periods, contractual notice, how notice pay works, payment in lieu of notice (PILON), garden leave, notice during probation, gross misconduct, redundancy, and the upcoming 2027 changes that make notice periods strategically more important for employers than they have been in years.

These are the legal minimums set by the Employment Rights Act 1996. They cannot be reduced by contract.

The asymmetry is clear: employers owe more notice the longer someone has been employed, but employees only ever owe 1 week (unless their contract says otherwise). This is far less protective than Germany, where employer notice can reach 7 months, but more protective than the US, which has no statutory notice requirement at all.

One detail that catches people out: the statutory notice for employers is based on completed years of continuous service, not rounded up. If someone has worked for 4 years and 11 months, the statutory minimum is 4 weeks, not 5. The fifth week only kicks in once they have completed a full 5 years.

In practice, most UK employers set contractual notice periods that are longer than the statutory minimum. A 1-month notice period for junior roles, 3 months for mid-level and senior roles, and 6 months for executives is common. These contractual periods apply instead of the statutory minimum, as long as they are at least as long as the statutory minimum.

If a contract specifies a notice period shorter than the statutory minimum, the statutory period overrides it automatically. The employee gets the longer of the two. If the contract is silent on notice, the statutory minimum applies by default.

Both parties must agree to any change in contractual notice periods. An employer cannot unilaterally reduce an employee’s notice entitlement or increase the notice the employee must give without the employee’s consent. Attempting to do so is likely to be treated as a breach of contract.

Employees who work their notice period are entitled to their normal pay, including any regular overtime, commission, or allowances that form part of their usual earnings. Holiday continues to accrue during the notice period, and the employer can require the employee to take accrued but unused holiday during notice, provided they give twice as many days’ notice as the holiday days they want the employee to take (for example, 2 weeks’ notice to take 1 week of holiday).

If the employee is off sick during the notice period, they are still entitled to be paid. For statutory notice periods specifically, the employee receives their normal pay (not just Statutory Sick Pay) for at least the statutory notice weeks, as long as they have been employed for at least one month. This catches some employers out: even if the employee is on long-term sick leave and would normally only receive SSP, statutory notice pay must reflect their normal earnings.

For employees with variable hours, notice pay is calculated based on their average earnings over the previous 12 weeks (excluding weeks where no work was done).

PILON allows the employer to end the employment immediately by paying the employee what they would have earned during their notice period. This is common in the UK, particularly for senior roles or when the employer wants the employee to leave promptly.

There is an important distinction between contractual PILON and non-contractual PILON. If the employment contract includes a PILON clause, the employer can exercise it at any time and the payment is treated as earnings (subject to tax and National Insurance in the normal way). If there is no PILON clause in the contract, making a payment in lieu is technically a breach of contract by the employer, though the employee will rarely object since they are receiving their money and leaving. However, in the absence of a contractual PILON clause, the first GBP 30,000 of the payment may be tax-free as a termination payment.

From a practical standpoint: if you anticipate ever wanting to end employment immediately and pay instead of requiring someone to work their notice, include a PILON clause in the employment contract from the outset. It gives you a clean, contractual mechanism to terminate quickly.

Garden leave is where the employee remains employed during the notice period but is not required to attend work or perform duties. They stay at home (“in their garden”) while continuing to receive full pay and benefits. The employment contract remains in force, which means restrictive covenants, confidentiality obligations, and the duty of good faith all continue to apply.

Garden leave is not an automatic right for the employer. It must be permitted either by a specific garden leave clause in the employment contract or by mutual agreement. Without a contractual right to put someone on garden leave, the employer risks a breach of contract claim, particularly for roles where the employee has a legitimate interest in continuing to work (for example, roles that require ongoing client contact or professional development).

Garden leave is commonly used for senior employees, employees with access to confidential information, and employees who are leaving to join a competitor. It keeps the employee bound by their contractual obligations while preventing them from accessing the business during the transition period.

UK law does not treat probation periods differently when it comes to statutory notice. If an employee has been employed for at least 1 month, they are entitled to the statutory minimum of 1 week’s notice from the employer, even if they are still within their probation period.

However, many employment contracts specify a shorter contractual notice period during probation, typically 1 week for both parties. This is perfectly lawful as long as it does not fall below the statutory minimum. After the probation period ends, the longer contractual notice period (often 1 to 3 months) kicks in.

This is about to become much more important. From January 2027, the unfair dismissal qualifying period drops from 2 years to 6 months. Most probation periods are 3 to 6 months. This means that by the time probation ends, the employee may already have (or be very close to having) unfair dismissal protection. Employers who previously relied on the 2-year qualifying period to exit employees without risk will need to make decisions during probation, not after it.

Gross misconduct is the one situation where no notice period is required. The employer can dismiss the employee immediately (summary dismissal) without notice or PILON. Examples of gross misconduct include theft, fraud, violence, serious insubordination, being under the influence of drugs or alcohol at work, and serious breaches of health and safety rules.

The bar for gross misconduct is high, and the employer must still follow a fair disciplinary process. Summary dismissal without a proper investigation, hearing, and right of appeal is likely to be found unfair by a tribunal, even if the underlying misconduct was genuine. The process matters as much as the substance.

For international companies, this is a critical difference from the US. In the UK, you cannot simply fire someone for cause and walk away. Even in cases of clear gross misconduct, there must be a documented process. The EOR will (or should) manage this process, but the client company needs to understand that “immediate” dismissal still involves an investigation and hearing that may take days or weeks.

Redundancy follows the same statutory notice rules as any other dismissal. An employee being made redundant is entitled to the same minimum notice based on their length of service. If the employer wants to end the employment before the notice period expires, they must pay in lieu.

Redundancy pay is separate from and in addition to notice pay. An employee with 2 or more years of service is entitled to statutory redundancy pay (half a week’s pay for each year of service under 22, one week for each year between 22 and 41, and one and a half weeks for each year over 41, capped at GBP 700 per week as of April 2025). The notice period runs on top of this.

For collective redundancies (20 or more employees within 90 days), additional consultation requirements apply. The employer must consult with employee representatives for at least 30 days (for 20-99 redundancies) or 45 days (for 100+ redundancies) before any dismissals take effect. These consultation periods run alongside or before the individual notice periods.

The Employment Rights Act 2025 received Royal Assent on 18 December 2025 and introduces two changes that fundamentally alter the significance of notice periods for UK employers:

First, the qualifying period for ordinary unfair dismissal claims drops from 2 years to 6 months, effective 1 January 2027. This means employees gain protection much earlier. An employee who starts work on 2 July 2026 will have 6 months’ service on 1 January 2027 and will immediately gain unfair dismissal rights.

Second, the statutory cap on unfair dismissal compensation is removed entirely. Currently capped at the lower of 52 weeks’ pay or GBP 118,223, awards will be uncapped from January 2027. For high earners, this creates significant financial exposure.

The notice period connection is this: an employee’s statutory notice period counts toward their continuous service. If you dismiss an employee with immediate effect just before they reach 6 months, but their statutory notice period would take them over the threshold, they may still qualify for unfair dismissal protection. This means employers cannot simply terminate at 5 months and 3 weeks to avoid the qualifying period. The notice period extends their effective service.

For employers, the practical implication is clear: make performance decisions during probation, not after. If a new hire is not working out, address it within the first 3 to 4 months while there is still a comfortable margin before the 6-month threshold. Waiting until month 5 leaves almost no room for error.

When you hire a UK employee through an EOR, the EOR is the legal employer and the employment contract, including notice provisions, is between the EOR and the employee. The EOR is responsible for ensuring the notice period complies with statutory minimums and for managing the termination process, including notice pay, PILON, or garden leave.

The client company initiates the decision to terminate, but the EOR executes it. This means the EOR should advise on the correct notice period, calculate the cost of PILON if applicable, and handle the administrative process including final pay, accrued holiday, and any redundancy entitlements.

Key questions to confirm with your EOR before hiring in the UK: what notice period is specified in the employment contract? Is there a PILON clause? Is there a garden leave clause? What is the probation period length and notice during probation? How will the EOR handle the 2027 unfair dismissal changes, particularly around probation reviews and early performance management?