Notice of termination of employment UK

Ending a professional relationship, whether initiated by an employer or an employee, requires care, clarity and compliance with UK employment law. A formal notice of termination of employment is an essential step in this process. 

Whether you’re an employer drafting a termination policy or an employee giving a notice of termination of employment, understanding the correct process helps ensure a fair and legally compliant transition.

To make sure you’re following all obligations, we’ve put together a notice of termination of employment checklist. 

The notice of termination of employment checklist covers:

• Step-by-step post-notice actions.
• When to communicate and how.
• Key documentation to prepare.
• Legal risks to watch for.
• Final pay and offboarding to-dos.

Download the checklist now. 

Understanding notice of termination in the UK

What is a notice of termination of employment?

A notice of termination of employment is a formal written communication that ends an employment relationship between an employer and an employee. It can be issued by the employer, in the cases of redundancy or dismissal or by an employee in the form of a resignation. 

Providing a clear, compliant notice helps ensure a smooth transition, reduces the risk of disputes and meets legal obligations under UK employment law.

Common scenarios

A notice of termination of employment can arise in several situations. Understanding the context is essential, as the rules and obligations differ depending on whether the termination is initiated by the employee or the employer. 

Below are the most common scenarios in the UK. 

Resignation

When an employee chooses to resign, they must provide their employer with the required notice. This could be the statutory notice period or a longer contractual notice period if stated in their contract.

To do this, employees can use a notice of termination of employment by employee letter to formally communicate their decision. The notice should include their final working day, allowing the employer time to plan handovers and recruitment if necessary.

Dismissal

An employer may dismiss an employee for reasons such as misconduct, poor performance or another fair ground. In these cases, the employer must provide a notice of employment termination letter that clearly states the final working date and, where applicable, the reasons for dismissal.

The amount of notice required depends on the employee’s length of service and their contract. However, in cases of gross misconduct, an employer can terminate a professional contract without notice, provided the decision follows a fair disciplinary process.

Redundancy

Redundancy occurs when a role is no longer required, often due to organisational restructuring, cost-cutting or business closure. Employers must issue a formal notice of job termination and follow a fair redundancy process, which may include consultation, selection criteria and redundancy pay.

Employees are entitled to either their statutory notice period or the contractual notice period, whichever is longer. In addition, they may qualify for redundancy pay, depending on their length of service and age. Employers must also clarify arrangements for notice period and holiday pay in the termination letter.

Employer vs employee: who gives notice and what happens next

While both employer and employee are within their rights to end a position contract, the process to do this differs slightly. 

Here’s how businesses should give notice vs employees. 

When an employer gives notice

For businesses, ending a contract needs to be due to a fair and legally justifiable reason. Common grounds include:

• Redundancy: Where the employee’s role is no longer required due to restructuring, downsizing or business closure.
• Performance: Where the employee is consistently unable to meet the standards required, despite performance reviews and support.
• Misconduct: Where the employee’s behaviour breaches workplace rules or policies. In cases of gross misconduct, termination can be immediate (summary dismissal) without notice.

HR professionals and business owners must also be mindful of the risk of unfair dismissal. And we would always recommend seeking advice from a HR Advisory professional before diving into making any decisions. 

But, under the Employment Rights Act 1996, an employee with two years’ continuous service has the right not to be unfairly dismissed. Employers need to follow a fair process, including consultation, warnings and documented procedures, before issuing notice. Failure to do so could result in a tribunal claim. 

When an employee gives notice

It’s more simple for employees and they can choose to leave their role for any reason. But to do so, they must submit a resignation notice. The process for this should be: 

1. Submit written notice: The employee provides a resignation letter stating their intended final working day.
2. Serve the notice period: This may be the statutory notice period (minimum one week after one month’s service) or the longer contractual notice period specified in the employment contract.
3. Handover responsibilities: Employees are generally expected to complete outstanding work and assist with handovers during their employee notice period.

As a business owner or HR professional, you can respond to this by: 

• Confirming the final working date in writing.
• Clarifying arrangements for holiday pay and outstanding entitlements.
• Deciding whether the employee will work their notice, be placed on garden leave or receive payment in lieu of notice.

Notice period UK laws

Statutory vs contractual

In the UK, the rules surrounding notice periods and termination are governed by the Employment Rights Act 1996. This legislation identifies out the statutory notice period that must be given, based on the employee’s length of continuous service:

• At least one week’s notice if employed for between one month and two years.
• One additional week’s notice for each year of service, up to a maximum of 12 weeks.

Employment contracts can also set out contractual notice periods, which may be longer than the statutory minimum. Both parties must comply with whichever is greater, statutory or contractual, unless there’s a valid reason for immediate termination (such as gross misconduct).

Statutory notice period

A statutory notice period applies once an employee has been continuously employed for at least one month. 

• For employees:
  • One week’s notice after one month of service.
  • Two weeks’ notice after two years of service.
  • One additional week for each further year, up to a maximum of 12 weeks.
• For employers:
  • Must give the same minimum notice as above, based on the employee’s length of service.
    

Contractual notice period

The contractual notice period is the notice length agreed in the employment contract. This can be longer (but not shorter) than the statutory minimum. Employers often set longer notice periods for senior roles, for example one to three months, to allow time for a proper handover.

Notice period and holiday pay:

• During the notice period, employees are entitled to their normal pay and benefits.
• If the employee has unused holiday entitlement, employers must either allow it to be taken during the notice period or pay it out as accrued holiday pay in the final salary.

Type of notice	Definition	Minimum entitlement	Key considerations
Statutory	Legal minimum notice required under the Employment Rights Act 1996.	1 week after 1 month of service, increasing by 1 week per full year worked (max 12 weeks).	Cannot be reduced by contract, but can be extended.
Contractual	Notice set out in the employment contract.	Must be equal to or greater than statutory.	Often longer for senior staff; can include clauses on garden leave or payment in lieu of notice.

Best practice: what employers should do when notice is given

To ensure compliance and maintain good employee relations, employers should take a structured approach when a notice of termination of employment is given, whether by the employer or the employee.

Key steps include:

1. Confirm in writing: Acknowledge the notice and confirm the employee’s final working date.
2. Review notice obligations: Check whether the employee’s statutory or contractual notice applies and whether garden leave or payment in lieu of notice (PILON) is appropriate.
3. Address entitlements: Clarify how salary, benefits, unused annual leave and other payments will be managed during the employee notice period.
4. Plan for transition: Arrange a clear handover of duties, client relationships or projects.
5. Communicate appropriately: Inform relevant managers or teams at the right time, ensuring professionalism and confidentiality.
6. Document everything:  keep a copy of the resignation or termination letter, the employer’s response and any agreements about final pay or benefits.

FAQs about employment termination and notice periods

Stay compliant with Employment Hero

Managing a notice of termination of employment isn’t just about ending a contract, it’s about making sure the process is fair, legally compliant and respectful to both parties. By taking a structured approach, you can protect your business while maintaining positive relationships with departing employees.

For HR professionals and business owners who want to feel certain they are doing this, Employment Hero has a helpful HR advisory service who can answer employment related queries. But our platform can do more than that, the Employment Operating System (OS), helps you stay compliant by streamlining HR processes, from generating compliant termination of employment letters to tracking notice periods and entitlements. 

Download the notice of termination of employment checklist now.