notice pay

Notice Pay – Is it ok not to pay?

Notice Pay – Is it ok not to pay?

Notice period and pay are commonly found in a contract of employment. It is something employers and employees alike are familiar, with both parties expecting to either receive it or pay it.

However, there are times when not giving notice pay is necessary.

Whilst a contractual right, there are circumstances where employers can terminate employment without paying it. Employers must follow ACAS best practise when dealing with Gross Misconduct and are obliged to follow those procedures thoroughly.

If an employee has more than two years service, you terminate employment for Gross Misconduct and don’t pay contractual notice there may be way for a tribunal claim if you haven’t followed due process.

An employer must always act in a fair and reasonable way.

The key to avoiding such tribunal situation is carrying out a thorough investigation into the alleged Gross Misconduct. If the employee is found to have committed Gross Misconduct the absence of notice pay maybe reasonable. However, where there isn’t a clear act of Gross Misconduct withdrawing notice pay should be avoided.

What’s the difference between Misconduct and Gross Misconduct?

An act of misconduct is classed as a minor breach. For example, when inappropriate behaviour is displayed by an employee or an act that breaks a workplace/organisational rule. This could be bullying, harassment, poor conduct or behaviour, policy infractions and so on.

Whereas Gross Misconduct is often an illegal or serious breach of company policy. For example, this could be theft, physical violence, gross negligence, or serious insubordination.

 A repeat of misconduct issues can be considered Gross Misconduct. Although, careful consideration would be essential during an investigation before a decision to move to a formal hearing took place.

How does an employee’s right to appeal affect notice pay?

It is important to remember that an employee has the right to appeal any outcome of a disciplinary hearing. If you have taken the decision to terminate as a result of Gross Misconduct and so end employment immediately, should the employee appeal and be successful you may have to pay notice or even reinstate the employee, if the sanction was overturned. The employee may be reinstated but then choose to resign which would mean notice pay should be awarded as per the employee contract.

Severance pay

An employer may find themselves in a situation where severance pay is called for. This is often used when someone in a senior position has underperformed or an act short of Gross Misconduct is found. Notice pay should not be withdrawn however an employer may consider removing another benefit such as bonus or shares.

Ever had an employee not work their contractual notice?

When this happens an employer can withhold statutory notice pay. Put simply, the employee is in breach of their contract by not following procedure and/or not working their notice. If the employee wants to work their notice period and you do not want them to you must not hold notice pay and consider Garden Leave or PILON as an alternative.

How can HPC support you?

Our team of expert HR Consultants can advise and support you through all of the scenarios mentioned above to ensure you are following the correct process and remaining compliant. Failing to comply when you should be paying it can result in employment tribunals and fines for your company. Our HR services provide you with peace of mind that you remain compliant with all employment law.

To find out more information or if you require any advice about notice pay, get in contact with our team of experts.

T: 0330 107 1037


Twitter: @HPC_HRServices

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