Termination of Employment

Colleagues Meeting To Discuss Their Future Financial PlansIf you want to terminate an employee’s position, you will need to give the correct amount of notice. How much notice you should give will depend on the notice period stated in the employment contract. The legal minimum notice period depends on the number of years the employee has worked for you:

  • one week’s notice for  employees who have worked for at least one month but less than two years
  • two weeks’ notice for employees who have worked for two years exactly
  • For those who have worked for more than two years, you should add an extra week’s notice for every complete year up to a maximum of 12 weeks

If your employee does not have a specific notice period in their contract, and do not qualify for the legal minimum notice period stated above, they are still entitled to reasonable notice.

On the other hand, if your employee wishes to leave their position then they must provide you with the correct amount of notice, which will either be their statutory minimum notice or the amount agreed in their employment contract. If an employee gives notice and later changes their mind, the notice can only be withdrawn if both you and the employee agree to it otherwise you can still acknowledge them as having resigned.

You are entitled to summarily dismiss (dismiss immediately without giving notice) an employee for gross misconduct. Most employers define what actions and behaviours amount to ‘gross misconduct’ in their disciplinary or grievance procedures. The Acas Code of Practice also contains guidance as to what may amount to gross misconduct worthy of summary dismissal. If you summarily dismiss your employee for a reason other than gross misconduct then they may have a claim for unfair dismissal.

You should still pay your employee their normal pay during their notice period if they work their normal hours. If they are unable to work their notice period due to illness or injury, you should still pay them normally. If the employee’s contractual notice period is at least one week more than the statutory minimum they are entitled to, you are not obligated to pay them for the whole of their notice period.

Pay in lieu of notice

You may wish to pay your employees instead of giving them notice. Your employee is entitled to pay in lieu of notice by law, but some employee contracts may also allow this. The usual rate of pay should be at the rate of your employee’s normal wages but their contract may allow for more than this.

You do not have to give your employee pay in lieu of notice if they have been dismissed for gross misconduct.

Holiday pay 

Your employee is entitled to any holiday pay that they have built up before leaving but haven’t used yet. You can also deduct any overpayment of holiday pay that they did not accrue in that year before they left.


You are not legally required to provide a reference for an employee when they leave, unless their employment contract says so or if it is needed by a regulatory body such as the Financial Conduct Authority. 

You are also not legally required to show the reference to the ex-employee. If the employee wishes to see the reference made about them, they must write to the employer the reference was sent to. 

You have a duty to write an accurate reference about your ex-employee and must not mislead the employer asking for a reference. Private and confidential information must not be included unless the ex-employee agrees to it.

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