Where a contract of employment provided that "the employer may make a payment in lieu of notice to the employee" and the employer chose to summarily dismiss the employee without cause or pay in lieu of notice, the employee's claim was for damages for wrongful dismissal, subject to his duty to mitigate his loss, and not for a sum due under the contract, holds the Court of Appeal, by a majority, in Cerberus Software Ltd v Rowley.
In Secretary of State for Trade and Industry v Walden and another  IRLR 168 EAT, the EAT held that the statutory definition contained in the Employment Rights Act 1996, section 183 is exhaustive in setting out the events that can constitute "insolvency" for the purposes of an employee's claim for certain payments from the Secretary of State.
A term of a contract of employment providing that the employee could be dismissed "with immediate effect" if he missed performance targets did not terminate or exclude his right, under other provisions of the contract, to a payment in lieu of three months' notice, holds the Court of Appeal in T & K Home Improvements Ltd v Skilton.
A clause in a contract of employment providing that the employee could be dismissed with immediate effect, if he failed to achieve his performance target was ambiguous, holds the EAT in T & K Home Improvements Ltd v Skilton, and did not of itself exclude the employee's right to pay for the contractual notice period.
A provision of a contract of employment, which entitled the employer to terminate the contract either by giving the employee notice or summarily on paying him in lieu of notice, did not give the employer a third option of giving no notice and making no, or less than full, payment, holds the EAT in Cerberus Software Ltd v Rowley.
In EMI Group Electronics Ltd v Coldicott (HM Inspector of Taxes), the High Court rules that a payment in lieu of notice paid under an express contractual provision is an emolument "from" the employment, and therefore liable to income tax in full under Schedule E.
An employee's contract was frustrated when injury made him unable to work again for his employer and, as the contract ended by operation of law rather than by the employer's termination, the employee was not entitled to payment in lieu of notice, holds the EAT in G F Sharp & Co Ltd v McMillan.
A wrongfully dismissed employee could not claim damages for loss of the right to claim compensation for unfair dismissal, which he would have acquired had he been given due notice, where the employer had a right under the contract of employment to make a payment in lieu of notice, holds the Court of Session in Morran v Glasgow Council of Tenants Associations and others.
In Secretary of State for Employment v Thompson, an employee whose employment ended without notice on his employer's insolvency was entitled to notice pay from the national insurance fund, but was under a duty to mitigate his loss.
In Abrahams v The Performing Right Society Ltd, it is held that there is no duty to mitigate where an employment contract provides for termination on payment of a sum in lieu of notice.
HR and legal information and guidance relating to payments in lieu of notice.