Where a contract expressly provides that it can be terminated immediately by making a payment in lieu of notice, the making of the payment is sufficient to lawfully terminate the contract (for contractual purposes) even if the employee is unaware of the payment until later.
The date of termination may be critical where significant bonus or incentive rights only accrue if the employee is still employed on a specific date. Where this could be relevant in a particular situation, employers should ensure they make the PILON promptly (and best practice remains to inform the employee of the payment at the same time). (Société Générale v Geys, CA)
The position will be different if the contract expressly requires notice of the payment to be given. The effective date of termination for statutory claims will also be different, as for this purpose the employee must have had a reasonable opportunity of finding out about his dismissal.
Key contacts
Samantha Brown
Managing Partner, Employment, Pensions and Incentives, UK and EMEA, London
Steve Bell
Managing Partner, Employment, Industrial Relations and Safety, Asia and Australia, Melbourne
Emma Rohsler
Partner, Head of Employment, Pensions and Incentives, EMEA, Paris
Tim Leaver
Partner, London
Andrew Taggart
Partner, London
Fatim Jumabhoy
Partner, Head of Employment & Workplace Investigations, Asia, Singapore
Barbara Roth
Partner, New York
Christine Young
Partner, London
Disclaimer
The articles published on this website, current at the dates of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.