Notice Period

What is a Notice Period?

A notice period is the stipulated amount of time between when an employee or employer provides notification of employment termination and the actual last day of work. During this period, the employment relationship continues, and both parties have specific rights and obligations.

Notice periods serve to provide adequate time for transition—allowing employers to find replacement staff and employees to search for new opportunities while ensuring business continuity and protecting both parties' interests.

Types of Notice Periods

Contractual Notice Period

A contractual notice period is specified in the employment contract between employer and employee. It represents the agreed-upon notice requirement and may exceed (but cannot be less than) the statutory minimum required by local labor law.

• Defined in the written employment contract
• Can vary based on position, seniority, or negotiation
• Must meet or exceed statutory minimums
• Legally binding on both parties
• Can differ for employer vs. employee obligations

Statutory Notice Period

Also known as a legal or minimum notice period, this is the minimum notice requirement mandated by local employment law. It typically increases based on length of service and serves as a floor that contractual terms cannot go below.

• Set by national or state labor legislation
• Usually scales with tenure (longer service = longer notice)
• Different minimums may apply to employer vs. employee
• Cannot be waived or reduced below statutory minimum
• Varies significantly across APAC countries

Probationary Notice Period

During probationary periods (typically 1-6 months at start of employment), shorter notice periods usually apply, allowing both parties to assess fit with less commitment.

• Shorter than standard notice periods
• Often 1 day to 2 weeks
• Specified in employment contract
• Allows quick separation if poor fit
• Still subject to fair treatment requirements

Notice Period by Country in APAC

Singapore

• Statutory minimum: Not specifically prescribed by Employment Act
• Common practice:
  • 1 week for service under 2 years
  • 2 weeks for 2-5 years service
  • 4 weeks (1 month) for 5+ years service
• Probation: Typically 1 week or less
• Senior roles: Often 2-3 months contractual notice
• Notes: Notice periods are contractual but must be "reasonable"

Australia

• Statutory minimum (National Employment Standards):
  • 1 week for under 1 year service
  • 2 weeks for 1-3 years
  • 3 weeks for 3-5 years
  • 4 weeks for 5+ years
  • Additional 1 week if employee over 45 and 2+ years service
• Probation: No statutory requirement, usually 1 week
• Employee notice: 1 week minimum regardless of tenure
• Summary dismissal: No notice for serious misconduct
• Notes: Cannot be less than NES minimum

Hong Kong

• Statutory minimum:
  • First month: No notice required (or 7 days wage in lieu)
  • After 1 month: 1 month notice or 1 month wage in lieu
• Common practice: 1 month notice standard
• Probation: Often shorter, but still 7 days minimum after first month
• Notes: Same notice period regardless of tenure

Japan

• Statutory minimum:
  • Employer: 30 days notice (or 30 days salary in lieu)
  • Employee: Typically 2 weeks by Civil Code
• Common practice: 1-3 months often contractually specified
• Probation: Usually 2 weeks
• Notes: Strong dismissal protections make actual terminations complex
• Voluntary resignation: 2 weeks sufficient under Civil Code, but contracts often require more

India

• Statutory minimum: Varies by applicable law
  • Industrial Disputes Act: 1 month for workers in industrial establishments
  • Shops and Establishments Acts: Varies by state
• Common practice:
  • Junior roles: 1 month
  • Mid-level: 2-3 months
  • Senior/specialized: 3 months (90 days standard in IT sector)
• Probation: 1 month typical
• Notes: IT and professional services often have extended notice periods

Malaysia

• Statutory minimum (Employment Act):
  • Under 2 years: 4 weeks
  • 2-5 years: 6 weeks
  • 5+ years: 8 weeks
• Common practice: Many contracts specify 1-3 months
• Probation: 1-2 weeks typically
• Notes: Minimum wages employees have shorter statutory periods

South Korea

• Statutory minimum: No specific requirement in Labor Standards Act
• Common practice:
  • General: 30 days
  • Often 1-3 months by contract
• Probation: Often shorter, around 1-2 weeks
• Severance: Separate from notice; 30 days average wage per year of service
• Notes: Strong employment protections; dismissal difficult

Thailand

• Statutory minimum: Depends on payment frequency
  • Daily paid: 1 day
  • Weekly paid: 7 days
  • Bi-weekly paid: 14 days
  • Monthly paid: 1 month
• Common practice: 1 month for salaried employees
• Probation: Usually 1 month or less
• Severance: Separate payment scales with tenure

Philippines

• Statutory minimum: 30 days (one month) for both employer and employee
• Common practice: 30 days standard
• Probation: 30 days typically maintained
• Notes: Can be waived by mutual consent; 30-day rule strictly followed

Vietnam

• Statutory minimum:
  • Indefinite contracts: 45 days
  • 12-36 month contracts: 30 days
  • Under 12 months: 3 working days
• Common practice: Follows statutory minimums
• Probation: 3 days typically
• Notes: Must be in writing

Indonesia

• Statutory minimum: No specific statutory notice under Omnibus Law
• Common practice: 30 days typical in contracts
• Probation: 30 days common
• Notes: Termination by mutual agreement common; unilateral termination complex

Taiwan

• Statutory minimum:
  • Under 3 months: 10 days
  • 3 months to 1 year: 20 days
  • 1-3 years: 30 days
  • 3+ years: 30 days
• Employee notice:
  • Under 1 year: 10 days
  • 1-3 years: 20 days
  • 3+ years: 30 days
• Common practice: 1 month typical

Purposes and Importance of Notice Periods

For Employers

• Business continuity: Time to find and train replacement
• Knowledge transfer: Departing employee can document and share information
• Workload management: Redistribute responsibilities gradually
• Project completion: Finish critical work or transition to others
• Cost management: Predictable transition timeline

For Employees

• Job search time: Opportunity to find new employment while still earning
• Financial security: Continued salary during transition
• Reference timing: Can request references while still employed
• Professional closure: Complete projects and leave on good terms
• Career planning: Time to consider options carefully

For Both Parties

• Reduced conflict: Clear expectations minimize disputes
• Professional relationship: Maintain goodwill and networks
• Legal compliance: Meets statutory obligations
• Smooth transition: Orderly handover benefits everyone

Notice Period Obligations and Rights

During the Notice Period

Employee Obligations

• Continue performing job duties diligently
• Maintain professional standards
• Protect confidential information
• Cooperate with transition and handover
• Work full notice period (unless released early)
• Not engage in competing activities (if restricted)

Employer Obligations

• Continue paying full salary and benefits
• Provide normal working conditions
• Allow reasonable time for job search (in some countries)
• Process final settlement accurately
• Provide employment references if requested
• Maintain professional treatment

Alternatives to Working the Notice Period

Payment in Lieu of Notice (PILON)

The employer pays the employee their salary for the notice period but releases them from work duties immediately.

• Employee contract ends on notification date
• Payment equals notice period salary
• May include benefits value
• Common when immediate separation preferred
• Must be contractually provided for or mutually agreed

Garden Leave

Employee remains employed and paid during notice period but is instructed not to work or come to the office.

• Employment continues through notice period
• Employee receives full salary and benefits
• Cannot work for competitors during this time
• Used to prevent knowledge transfer to competitors
• Employee remains bound by employment obligations

Mutual Agreement to Vary

Both parties can agree to modify the notice period.

• Can shorten or extend beyond contractual terms
• Must be mutually voluntary
• Should be documented in writing
• Common when both parties benefit from adjustment

Notice Period Negotiation and Buyout

Employee may negotiate to buy out notice period by paying employer.

• Not universally accepted practice
• More common in some industries/countries
• Payment amount negotiable
• Should be formalized in writing

Notice Period Considerations

Resignation During Notice Period

If an employee resigns, they typically must work the full contractual notice period.

• Failure to serve full notice may be breach of contract
• Employer may claim damages for breach
• Employer may deduct from final pay (where legally permitted)
• Can negotiate early release

Termination by Employer

Employers must provide statutory or contractual notice (whichever is greater).

• For misconduct: May result in summary dismissal (no notice)
• For redundancy: Full notice required plus severance
• For poor performance: Full notice required
• Failure to give proper notice may result in wrongful dismissal claims

Notice Period and Leave

Annual Leave During Notice

• Employees may request to take accrued annual leave during notice
• Employer can approve or deny based on business needs
• In some countries, employer can require employee to use leave during notice
• Unused leave typically paid out with final settlement

Sick Leave During Notice

• Employees remain entitled to sick leave during notice period
• Must provide medical certificates as normally required
• Notice period may be extended in some jurisdictions
• Cannot be used to avoid notice obligations

Public Holidays During Notice

• Count as part of the notice period
• Employee still entitled to public holiday pay
• Notice period calculated in calendar days, including holidays

Probation and Notice Periods

Most countries allow shorter notice periods during probation:

• Typical probation notice: 1 day to 2 weeks
• Allows quick separation if poor fit
• Still must be reasonable and fair
• Cannot be discriminatory
• Some countries require minimum notice even during probation

Senior Executives and Extended Notice

Senior roles often have longer contractual notice periods:

• Common: 3-6 months for executive positions
• Reflects difficulty in replacing senior talent
• Allows comprehensive handover
• May include non-compete restrictions
• Often negotiated as part of employment package

Common Notice Period Disputes

Insufficient Notice Given

• Employee leaves without working full notice
• May result in breach of contract claim
• Employer may withhold final pay (where permitted)
• Can damage professional reputation

Forced Resignation

• Employer pressures employee to resign
• May constitute constructive dismissal
• Employee may have legal reclaims
• Can result in wrongful termination suits

Notice Period During Probation

• Disputes over whether probation properly established
• Disagreement on applicable notice period
• Claims of unfair dismissal during probation

Garden Leave Disputes

• Disagreements over restrictions during garden leave
• Questions about ability to seek other employment
• Disputes over benefit continuation

Payment in Lieu Calculation

• Disagreements over amount owed
• Whether benefits included in calculation
• Pro-rata considerations

Best Practices for Managing Notice Periods

For Employers

Clear Contracts

• Specify notice period clearly in employment contracts
• Address probationary notice separately
• Include provisions for payment in lieu if desired
• Clarify calculation methods

Consistent Application

• Apply notice period policies uniformly
• Document reasons for any variations
• Avoid discrimination in enforcement

Professional Handling

• Respect departing employees
• Facilitate smooth transitions
• Conduct exit interviews
• Maintain positive relationships

Planning

• Use notice period for comprehensive handover
• Document critical knowledge
• Begin recruitment process
• Redistribute responsibilities

For Employees

Understand Obligations

• Know contractual notice period
• Be aware of statutory minimums
• Understand consequences of breach

Professional Resignation

• Provide written resignation letter
• Offer to work full notice period
• Assist with transition planning
• Maintain performance standards

Negotiation

• Discuss early release if needed for new role
• Propose solutions (unused leave, payment)
• Get any agreements in writing

Documentation

• Create handover notes
• Document ongoing projects
• Share institutional knowledge
• Organize files and materials

How EOR Providers Handle Notice Periods

When using an Employer of Record like AYP:

Compliance

• Ensures notice periods meet local statutory requirements
• Includes appropriate terms in employment contracts
• Handles calculations correctly

Administration

• Manages resignation and termination processes
• Calculates final payments including notice
• Coordinates with client on transition planning
• Processes payment in lieu when appropriate

Guidance

• Advises clients on local notice period norms
• Recommends appropriate contractual terms
• Assists with difficult situations
• Ensures fair and legal treatment

Protection

• Reduces risk of notice period disputes
• Proper documentation of all steps
• Legal compliance throughout process

Notice Period Trends

Increasing Lengths

• Some industries seeing longer notice periods
• Particularly in specialized or senior roles
• Reflects talent scarcity and transition costs

Flexibility

• More willingness to negotiate early release
• Recognition of mutual benefits
• Payment in lieu more common

Remote Work Impact

• Questions about notice period for remote workers
• Cross-border employment considerations
• Digital handover processes

AYP's Approach to Notice Periods

Across the 14+ APAC countries where AYP operates:

• Compliant contracts: Employment agreements include appropriate notice periods for each jurisdiction
• Local expertise: Understanding of statutory requirements and market practices
• Smooth transitions: Professional handling of resignations and terminations
• Clear communication: Transparent explanation of notice obligations to all parties
• Fair treatment: Ensuring employees are treated respectfully during notice periods
• Client coordination: Working with clients to manage handovers effectively

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