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KembaraXtra – Legal Terms – Payment in Lieu of Notice (PILON)
A payment in lieu of notice (PILON) is a payment made to an employee instead of requiring the employee to work during the notice period after termination of employment.
The payment is intended to compensate the employee for the earnings and benefits that would have been received during the notice period.
PILON clauses are commonly included in contracts of employment to allow employers to terminate employment immediately.
A properly drafted PILON clause should specify the circumstances in which it may be used and what payments are included.
If no contractual PILON clause exists, the payment may potentially amount to damages for breach of contract.
A payment in lieu of notice (PILON) is a payment made to an employee instead of requiring the employee to work during the notice period after termination of employment.
The payment is intended to compensate the employee for the earnings and benefits that would have been received during the notice period.
PILON clauses are commonly included in contracts of employment to allow employers to terminate employment immediately.
A properly drafted PILON clause should specify the circumstances in which it may be used and what payments are included.
If no contractual PILON clause exists, the payment may potentially amount to damages for breach of contract.
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