Notice Period Leave Policy

It’s important to note that employees must not lose holiday entitlement due to serving notice and any notice period leave policy must somehow factor outstanding leave into proceedings. Read more on the statutory recommendations below.
  • Author: Siva
  • Last updated: May 15, 2022
  • 5 Minutes
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Dealing with annual leave can be laborious at the best of times, but it can get even trickier if an employee is about to leave a company. Not only do you have to ensure it doesn’t clash with other employees’ days off, but you may have to deal with a variety of other factors too. Fortunately, you can minimise many potential problems by understanding both your company’s and the departing employee’s rights during their notice period and having a robust notice period leave policy to deal with issues.

With that in mind, let’s take a look at what to do about staff taking annual leave during their notice period.

What Is a Notice Period?

When an employee leaves a job, they usually have to work a notice period. A notice period is the amount of time an employee has to work for their employer after they resign, are dismissed or made redundant.

How long they have to work may depend on the following factors:

  1. How long they have worked for their employer.
  2. What their employment contract or work-based policies state.
  3. Whether they have been dismissed, made redundant or have resigned.

What is a Notice Period Leave Policy?

A notice period leave policy is a policy designed by an employer that specifies how leave is taken into consideration when an employee is serving their notice period. It will dictate whether leave can be taken whilst serving notice or whether additional pay will be given instead to cover any outstanding holidays.

It’s important to note that employees must not lose holiday entitlement due to serving notice and any notice period leave policy must somehow factor outstanding leave into proceedings.

How Might Leave Be Factored into A Notice Period?

For many employees, leave will be given as normal during their notice period. This may mean that if you have to serve 4 weeks’ notice but have 2 weeks annual leave left, you will only attend work for 2 of the 4 weeks. It’s up to your employer to decide if you can take leave during your notice period. If you go on paid holiday in your notice period you’re entitled to your usual wage.

If giving time off during the notice period is not possible, an employer may elect to pay the employee extra for any leftover leave. When you leave, you’ll be paid for any holiday you have accrued but not taken, up to your first 28 days of holiday entitlement. This is called your statutory holiday entitlement. If you get more than 28 days a year (including bank holidays), this is called a contractual holiday. Check what your contract says about leftover contractual holiday. You might still get paid for any days you don’t use.

How Much Will I Be Paid in The Notice Period?

You should get your full normal pay if you work during your notice period. This should include any work benefits, such as pension contributions, bonusses, free meals, etc.

If you’re off sick or on maternity leave, paternity leave or adoption leave you’ll only get whatever you would have been normally paid in those circumstances. For example, you might only get statutory sick pay if you are off sick.

If you are on holiday, you should receive your normal holiday pay which should be no less than your usual wage.

What If My Employer Tells Me Not to Work During My Notice Period?

Your employer should pay you as usual until the end of your notice period when your contract ends even if they do not require you to work. This is regardless of whether you have holiday entitlement or not. If you have no leave left but your employer asks that you remain away from work, you will be placed on something called gardening leave.

On garden leave you’ll be paid at your usual rate in your usual way – you’ll also pay your normal National Insurance and tax contributions. You should keep all your perks and benefits, such as pension contributions and bonusses etc.

If you are placed on gardening leave, it’s important to check if there are any extra rules in your contract. Some contracts may say that you can’t start another job while you’re on garden leave.

Can My Employer Force Me to Use Up Holiday Entitlement When Serving Notice?

Your employer can force you to use up any holiday you have left over. They may also tell you when to take it, so long as it is done in line with your contract of employment.

Check your contract to see how far in advance your employer should tell you to take holiday. If there’s nothing in your contract, they need to give you at least 2 days’ notice for each day of holiday. For example, if they want you to take 5 days’ holiday, they have to tell you at least 10 days in advance.

How long is the statutory UK notice period?

Statutory notice periods are set out in UK law to protect all workers and employers no matter what their individual contracts state. Statutory notice is one week for employees that are leaving a role they’ve been in for one month or more, meaning they must tell their employers that they’re leaving at least one week in advance.

For companies dismissing employees, statutory notice is slightly different and depends on the amount of time the employee has been in the role:

  1. A notice period of one week for employees who have been employed for over one month but less than two years.
  2. Two weeks’ notice for employees who have been employed for over two years, with an additional week’s notice for each further year of continuous employment, up to a maximum of 12 weeks’ notice (given for 12 or more years of continuous service).

This is the minimum notice that should be given for both dismissal and in the case of an employee being made redundant. In many cases, contractual notice (that is the notice period set out in the terms and conditions of the employment contract) will be longer.

In Conclusion

As with all situations in the workplace, good communication can go a long way. This is especially true when it comes to handling discussions relating to notice periods and annual leave. Having a clear notice leave period policy in place in the workplace can go a long way to keeping staff in the loop and ensuring statutory requirements are met. 

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Written by Siva

I write & describe the value & benefits delivered by Paperhift's rota planning, staff time tracking, and employee payroll management software. Especially useful for Shift Planners, Rota Managers, Team Admins, and HR Teams :-)