This week, Esther Smith, partner at Thomas Eggar, and Martin Brewer, partner and employment law specialist at Mills & Reeve, advise on whether there is a maximum notice period in a contract of employment.
The question:
Help! I have an associate who is being pressured to sign a new contract with a six-month notice period. She really doesn’t want to sign this as she thinks that it is unreasonable but doesn’t know where she stands. Is there a maximum notice period and what is it? If not is there anything she could do to try to get them to reduce it?
Legal advice:
Esther Smith, partner, Thomas Eggar
Notice periods are really a matter of negotiation between employer and employee. In this case I assume the notice period is six months on either side, so that the employer has to give six months should it wish to terminate the employment as does the employee.
In the event that the employer terminates, the long notice period is good news for the employee as it gives a guaranteed period of employment, and therefore income, or, as is the situation in most terminations, it provides the employee with six months’ salary on termination.
From the employee’s point of view a long notice period can be a tie, particularly if the employee is unhappy and wishes to take up a new post elsewhere. Often an employer and employee can agree an early release, although the employee will only get paid until they stop working, as it is not really in an employer’s interest to retain an unhappy and unmotivated employee unless they have to.
Also, an employee could always make the decision not to adhere to the terms of the contract and not give their employer the full notice period. Technically they would be in breach of contract, and whilst the employer could in theory sue them for breach, this is very rare, as the employer cannot demonstrate any loss to make it worth such an action pursuing. However, if an employee is going to take this action they need to do so with their eyes open. Also, if the employee needs a reference from their current employer, it may be worth sitting out that notice period, rather than incurring wrath!
Esther Smith is a partner in Thomas Eggar’s Employment Law Unit. For further information please visit Thomas Eggar
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Martin Brewer, partner and employment law specialist, Mills and Reeve
There is no maximum notice period for employment contracts (although there are minimum periods) and for relatively senior staff, six months is fairly common. The real issue here is why is she being asked/pressured to sign a new contract? Is it solely for the purpose of getting her to agree to a new, longer notice period or is there a whole new contract of which the notice period is only a part?
It is always open for one party to a proposed contract to say ‘no’. If the only change is to the notice period your associate can simply reject the proposal. Alternatively, if there is a wholesale revision she could negotiate to vary the notice period, although the employer might take the view that if she wants the benefits of the new contract she should also accept the longer notice period.
Martin can be contacted at: martin.brewer@mills-reeve.com
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