Redundancy Notice Periods and Garden Leave: What You Need to Know

Introduction: Notice Periods Explained

When you're made redundant, your employer must give you a notice period this is the time between being told about redundancy and your employment actually ending. Understanding your notice period rights is crucial because it affects when you can start a new job, how long you receive your salary, and when you'll receive your redundancy payment.

This guide explains statutory and contractual notice periods, what happens during notice, and what garden leave means in practice.

Statutory vs Contractual Notice Periods

Statutory Minimum Notice

By law, you're entitled to a minimum notice period based on your length of service:

1 month to 2 years' service: At least 1 week's notice
2 to 12 years' service: 1 week's notice for each complete year of service
12+ years' service: 12 weeks' notice (maximum statutory)

Example: If you've worked for your employer for 7 years, you're entitled to at least 7 weeks' statutory notice.

Contractual Notice Period

Your employment contract may specify a longer notice period than the statutory minimum. Common contractual notice periods include:

1 month's notice
3 months' notice (common for senior roles)
6 months' notice (for executive positions)

Important: You're entitled to whichever is longer the statutory minimum or your contractual notice period.

Which applies to you?

Check your employment contract. If it states a notice period longer than the statutory minimum, that's what applies. If it's shorter or doesn't mention notice, the statutory minimum applies.

What Happens During Your Notice Period?

Working Your Notice

During your notice period, unless you're on garden leave (see below), you typically:

Continue working normally
Receive your full salary and benefits
Accrue holiday entitlement
Remain bound by your contract terms (confidentiality, loyalty, etc.)
Continue to have employment rights

Time Off to Look for Work

If you've been employed for at least 2 years, you're entitled to reasonable paid time off during your notice period to:

Look for new work
Attend job interviews
Arrange training for future employment

There's no legal definition of "reasonable," but it's typically interpreted as a few hours per week. Your employer can't unreasonably refuse these requests.

Holiday During Notice

You continue to accrue statutory holiday during your notice period. Your employer may:

Require you to take remaining holiday during notice
Pay you for any untaken holiday when you leave

You can't be forced to forfeit accrued holiday unless your contract explicitly allows it (which is rare and potentially challengeable).

Payment in Lieu of Notice (PILON)

What is PILON?

Payment in Lieu of Notice means your employer pays you for your notice period but asks you to leave immediately without working it.

When can employers use PILON?

If your contract includes a PILON clause: Your employer can exercise it at their discretion
If no PILON clause exists: Your employer would need your agreement or they'd be in breach of contract (though this is rarely challenged)

What you receive with PILON

Your basic salary for the notice period
Typically, contractual benefits are NOT included (company car, health insurance, etc.) unless specified
Any accrued but untaken holiday pay

Tax: PILON is usually subject to income tax and National Insurance as normal pay.

Redundancy pay timing

If you receive PILON, your redundancy payment is typically paid at the same time (on your last day or final pay date).

Garden Leave: What It Means

Definition

Garden leave is when your employer asks you to stay away from work during your notice period while continuing to pay your salary and benefits. You remain employed but don't perform your duties.

Why do employers use garden leave?

To prevent you from working for competitors immediately
To protect confidential information and client relationships
To maintain business continuity during handover
To avoid potential disruption in the workplace

Your rights and obligations during garden leave

You MUST:

Remain employed and available if needed
Not start working for another employer (unless agreed otherwise)
Continue to comply with contractual obligations (confidentiality, non-solicitation, etc.)
Return company property if requested

You CAN:

Look for new work and attend interviews (but check your contract)
Prepare for your next role
Take holiday (if approved)

You CAN'T (usually):

Start working for a new employer during garden leave
Contact clients or colleagues for business purposes
Access company systems or premises (unless permitted)

Payment during garden leave

During garden leave, you receive:

Full salary
Contractual benefits (company car, health insurance, pension contributions)
Accrued holiday

This is different from PILON, where benefits may not be included.

When can employers impose garden leave?

If your contract includes a garden leave clause: Your employer can enforce it
If no garden leave clause exists: Your employer would need your agreement

Check your contract. Garden leave clauses are common in senior roles, finance, sales, and client-facing positions.

Can You Leave Before Your Notice Period Ends?

With employer agreement

You can negotiate an earlier leaving date with your employer. This might happen if:

You've found a new job that starts sooner
Your employer agrees it's mutually beneficial
You're on garden leave and your employer releases you early

Get any agreement in writing and confirm it doesn't affect your redundancy pay.

Leaving without agreement

If you leave before your notice period ends without agreement, you're in breach of contract. Your employer could:

Withhold pay for the unworked notice period
Sue for damages (rare, but possible in senior roles)
Refuse to pay redundancy pay (though this is challengeable)

Advice: Don't leave early without agreement. Negotiate instead.

Starting a New Job During Notice

If you're working your notice

You generally cannot start a new job while still employed, even if you're on paid time off to job hunt. Wait until your notice period ends.

If you're on garden leave

You typically cannot start a new job during garden leave unless:

Your employer agrees to release you early, or
Your contract explicitly allows it (very rare)

Many employment contracts contain clauses preventing you from working elsewhere during notice or garden leave. Check yours carefully.

If you've received PILON

If your employer has paid you in lieu of notice and ended your employment immediately, you're free to start a new job right away (subject to any post-termination restrictions like non-compete clauses).

Restrictive Covenants and Post-Termination Restrictions

Even after your notice period or garden leave ends, you may still be bound by:

Non-compete clauses

Prevent you from working for competitors for a period (e.g., 3-12 months). These are only enforceable if reasonable in scope, geography, and duration.

Non-solicitation clauses

Prevent you from poaching clients or employees. More commonly enforceable than non-compete clauses.

Confidentiality clauses

Prevent you from disclosing confidential information. These typically last indefinitely.

Note: From 2025 onwards, changes to UK employment law may limit the enforceability of some post-termination restrictions. Check current legislation or get legal advice.

How Notice Affects Redundancy Pay

When you receive redundancy pay

If you work your notice: Typically paid on your last working day or final payday
If you're on garden leave: Paid at the end of your notice period
If you receive PILON: Often paid immediately or with your final payslip

Redundancy pay is NOT affected by:

Whether you work your notice, are on garden leave, or receive PILON
Whether you find a new job during notice

You're entitled to statutory (or contractual) redundancy pay regardless of how your notice period is handled.

What to Do During Your Notice Period

Practical steps

Clarify your leaving arrangements: Confirm your last day, how notice will be handled, and when you'll be paid
Request a reference: Ask for a written reference before you leave
Complete handover tasks: Leave on good terms; you may need your employer's goodwill later
Use time off to job hunt: Exercise your right to reasonable paid time off for interviews
Understand restrictions: Review your contract for garden leave, non-compete, and confidentiality clauses
Plan your finances: Know when you'll receive your final pay and redundancy payment

If Your Employer Breaches Notice Period Rules

If your employer fails to give you proper notice or pay, you can:

Raise it informally

Write to HR explaining the issue and requesting they correct it.

Submit a grievance

Use your employer's formal grievance procedure if informal approaches fail.

Seek advice from ACAS

ACAS Helpline: 0300 123 1100
Website: acas.org.uk

Consider an Employment Tribunal claim

For breach of contract (failure to pay notice), you can claim:

Via Employment Tribunal (if the claim is under £25,000)
Via County Court (for claims over £25,000)

You must start ACAS Early Conciliation within 3 months less 1 day of the breach.

Key Takeaways

You're entitled to statutory minimum notice or your contractual notice period, whichever is longer
During notice, you can take reasonable paid time off to look for work if you have 2+ years' service
PILON means you're paid for notice but leave immediately benefits may not be included
Garden leave means you're paid full salary and benefits but don't work you can't usually start a new job during this period
Check your contract for garden leave, PILON, and post-termination restriction clauses
Your redundancy pay is unaffected by how your notice is handled

Where to Get Help

ACAS: 0300 123 1100 Free advice on employment rights and notice periods
Citizens Advice: citizensadvice.org.uk Free, impartial guidance
Gov.uk: gov.uk/redundancy-your-rights Official information

Understanding your notice period rights helps you plan your next move, protect your income, and leave your role on the best possible terms. If in doubt, seek advice early.