How to make a payment in lieu of notice
Author: Darren Newman
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- Consider including a right to terminate with a payment in lieu of notice in employment contracts.
- When dismissing an employee, decide whether to dismiss with or without notice.
- Consider whether or not a period of garden leave may be more appropriate.
- When dismissing an employee without notice, take care to protect confidential information and recover company property when appropriate.
- Clearly explain the position to the employee in writing, including the precise end date of the employment, and make the payment in lieu of notice promptly.
- Ensure that a payment in lieu of notice is correctly labelled as such when it is made.
- Include sums covering benefits in kind in the payment in lieu of notice, unless the contract provides otherwise.
- Be aware that payments made under a contractual PILON clause are taxable.