Can an employer dismiss an employee without notice if it pays him or her for the duration of the notice period?
An employer can dismiss an employee, pay him or her for the period of notice and require that the employee cease work immediately and not work out the notice period. This is known as a payment in lieu of notice.
Unless there is an express term in the contract permitting it, this technically represents a breach of the contract of employment and payments during the notice period are treated not as wages but as damages for breach of contract. Such a breach of contract will not permit the employee to recover damages for breach of contract provided that the payment in lieu compensates the employee fully for the wages and benefits that he or she would have received in the notice period. However, the employer will not be able to enforce post-employment restrictions, such as non-competition and non-solicitation clauses if it has breached the contract by terminating it without notice.