Pay in lieu of notice

If you want the employee to leave the business as soon as possible and it is not possible to mutually agree an early termination, one option is to pay the employee in lieu of notice. This means that the employee will stop working and receive all the money they would have received had they worked throughout their notice period in one lump sum.

The sums due and consequences of making a payment in lieu of notice depend on whether there is a clause in the contract expressly permitting you to make a payment in lieu of notice (a “PILON” clause).

BResourceFull Workbox is a subscription service. Become a member to access the full site and benefit from relevant, up-to-date information, related content and HR templates. Click on the banner below to enquire about membership.