Notice Period | Meaning and Definition

What is Notice Period?

A notice period is the time an employee must work after resigning before officially leaving a job. It begins when the employee submits their resignation and ends on their last working day, allowing the employer time to find a replacement. Typically, notice periods are Four weeks but can vary by role and company policy.

Tasks to complete during Notice Period

An employee works on various tasks while serving a notice period. Some of these tasks may include:

Getting paid final salary
Returning company property
Completing any assigned projects
Preparing handover documents
Assisting with training new staff members

Types of Notice Period

Generally there are seven types of notice period. Let’s discuss it one by one:

1. Statutory

When employer either terminates the employee or employee leave the organization by his own will he has to serve a hand in resignation period. This period can range from one week to one month.

2. Contractual

This is the amount of notice period which is pre defined in employment contract. This period is always longer than a statutory signing off period. This time period can vary.

3. Probationary notice

This period ranges from one day to 3 months based on employee designation. Usually this period is of short duration. Employees are also paid for that particular period they serve in the company.

4. Dismissal without notice

If the employee is terminated from the organization because of misconduct or unethical behavior he/she can be immediately removed without any advance information and payout.

5. Fixed term contract

In this kind of contract, no notice period is to be served by the employee. However, under certain circumstances they are required to serve a period.

6. Redundancy Pay

When the employee is terminated from the organization because his position is no longer required in the company, he has to serve this period. The duration of period to be served depends upon the number of years he has provide his service. For one year of service he has to serve a compulsion period of one week.

7. Withdrawing Notice

When an employer provided the notice period to employee it cannot be revoked until both the employer and the employee agrees on common terms.

Benefits for Employer

There are several benefits for employers:

It allows the employer time to find a replacement for the departing employee. This is especially important if the employee has specialized knowledge or skills that are not easy to find.
It gives the employer time to adjust to the change in staffing.
It allows the employer to review the employee’s work performance and decide whether to offer them a severance package.
It allows the employer time to settle any outstanding legal issues with the departing employee. An employee’s departure can often lead to disruptions in workflow and increased workloads for other employees.

Multiple Ways of Implementation

Here are certain ways by which an organization can implement :

1. Employment Contract

An organization can implement the notice period through the employment contract signed between the organization and the employee. They can show the employment contract whenever required to the employee.

2. Incentives or pay outs

Organizations can provide severance pay or incentives to pay employees to motivate them to work during their notice period.

3. Sympathetic Attitude

HRs must have a sympathetic attitude towards the employee who is leaving the organization which can motivate the employee while serving notice period.

What is payment in lieu of notice period?

In lieu of notice period” refers to the payment an employer makes to an employee when they are dismissed with immediate effect. This payment, also known as Payment in Lieu of Notice (PILON), occurs when an employer chooses to compensate an employee for their notice period instead of having them work through it.

Moreover, by offering PILON, employers ensure that employees receive the compensation they would have earned during their notice period. This, in turn, protects the employee’s rights to the financial benefits they are entitled to, even if they are not required to work during that time.

FAQs (Frequently Asked Questions)

What is the meaning of notice period?

The period of time that an employee has to work in their job after they have said that they are leaving, or after they have been asked to leave.

What is 1 month notice period?

A 1 month notice period means before leaving the organization an employee has to serve a notice period of 1 month.

What is a notice period example?

When an employee resigns or asked to leave from the organization that employee has to serve a notice period in the organization.

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