Pay in Lieu of Notice (PILON)
A payment in lieu of notice is made in circumstances where an employee is not required to work their notice period but is paid a sum of money instead. For such a practice to be lawful the contract of employment must expressly permit this, or, in the absence of a written clause, the employer and employee must agree to this. Enforcement of a payment in lieu without the contractual right or agreement to do so may be viewed as a breach of contract. In circumstances where such a payment is made the Effective Date of Termination is usually the last day worked, unless the employee is on a period of Gardening Leave – where they are paid as normal during the notice period, but not required to work it. In this case the Effective Date of Termination is normally the date the notice period expires.
See Notice Rights