Payment in Lieu | Part time Employee
Where an employer does not wish a leaving employee to work the notice period required under their contract (irrespective of which party has initiated termination), a payment in lieu of notice (PILON) in respect of the time and benefits of the notice period can be paid. Definition PILONs can either be contractual or ad hoc. A PILON becomes contractual where the right is specified in the CONTRACT or other contract documentation - the employer takes the right to make such a payment, rather than allowing the employee to work the notice period. The alternative is an ad hoc PILON, where the decision is made without pre-meditation and is non-contractual. Where the right is contractual, exercising the right does not breach the contract and thus all the contract terms (e.g. non-competition clauses) are still operative. Where the right is exercised in an ad hoc manner and there is no contractual right, the employer can exercise the right but, in that case, this destroys the contract and other cl...