Notice pay is separate from statutory redundancy pay. The two are calculated differently, paid for different reasons, and have different tax treatments. Receiving one does not reduce or replace the other. A redundancy package will typically contain both, plus any accrued holiday entitlement — these are distinct line items.
Your employer must give you formal written notice of termination. The notice period does not begin until written notice has been issued. A verbal notification of redundancy does not start the clock.
Statutory Notice
The statutory minimum notice period is set by the Employment Rights Act 1996. It applies once you have been employed for at least one month. Below one month, no statutory notice entitlement exists. From one month to two years, one week applies. From two years onwards, you accrue one additional week per complete year of continuous service up to a maximum of twelve weeks.
The statutory scale is a floor. An employer cannot give you less than the statutory minimum. They are not prevented from offering more, either as a contractual term or as part of a negotiated exit.
| Length of service | Minimum statutory notice |
|---|---|
| Under 1 month | None |
| 1 month to 2 years | 1 week |
| 2 to 12 years | 1 week per complete year of service |
| 12 years or more | 12 weeks |
Contractual Notice
Your employment contract may specify a notice period longer than the statutory minimum. This is common in professional roles, senior positions, and companies with formal HR policies. Where a contractual notice period exists and exceeds the statutory minimum, the contractual figure is what you are owed. Your employer cannot reduce this unilaterally.
Check your original offer letter as well as your current contract — notice terms are sometimes specified in one but not the other. If your contract has been varied or updated since you joined, verify which version applies. If you cannot locate any contract documentation, you are entitled to request a written statement of employment particulars. Your employer is legally required to provide one within two months of a request.
Payment in Lieu of Notice (PILON)
A payment in lieu of notice is a cash payment made in place of requiring you to work your notice period. Rather than remaining employed through the notice period, your employment ends immediately and you are paid a sum equivalent to what you would have earned during that time.
PILON is taxable as earnings. It is subject to income tax and National Insurance in full, regardless of the £30,000 termination payment exemption. This is the case whether the payment is made under a contractual PILON clause or by agreement at the point of termination. Do not assume it will be paid gross.
If your employer makes a PILON without contractual authority to do so — and you have not agreed to it — they are technically in breach of contract. In practice, this rarely creates a problem if the full sum is paid correctly, but it is worth understanding the distinction if you are negotiating a settlement agreement in which notice pay forms part of the total package.
Garden Leave
Garden leave occurs when your employer requires you to serve your notice period but not to attend work or perform duties. You remain an employee throughout, your contract remains in force, and your salary and contractual benefits continue to be paid. The term applies equally to remote non-attendance.
An employer cannot place you on garden leave without authority to do so — either a contractual garden leave clause or your agreement. If neither exists, requiring you to stay away from work while withholding duties may constitute a breach of contract. During a lawful garden leave period, any restrictive covenants in your contract remain enforceable. You may not start working for a competitor while on garden leave.
Working Your Notice
If you are required to work your notice period, your terms and conditions of employment continue unchanged. You continue to accrue annual leave during the notice period. You are entitled to take paid time off — up to two days per week under statute — to look for alternative employment or arrange retraining, provided you have worked for the employer for at least two years. This entitlement is paid at your normal rate.
Any accrued but untaken annual leave not taken during the notice period must be paid out on termination. Your employer cannot simply cancel it. If your employer wants to require you to take holiday during your notice period, they must give you notice of this at least twice the length of the holiday they are requiring you to take — so two weeks' notice to require one week of holiday.
Notice pay is calculated and paid separately from statutory redundancy pay — see Redundancy Pay for how those figures are produced. Your redundancy letter should confirm your notice period and the method of payment; see The Letter for what to check when it arrives.