Where a payment in lieu of notice is made, will the employer be obliged to compensate the employee for the loss of use of a company car?
An employee is generally entitled to receive a payment in lieu of all contractual benefits that they would have received had they worked out the full notice period. Therefore, if the use of a company car is a contractual benefit, the employer must compensate the employee for this loss by including an appropriate amount in the payment in lieu of notice. It is possible for the employer to exclude the right to payment in lieu of contractual benefits above basic salary. This must be done in the employment contract. Therefore, if the employer does not wish to compensate employees for the loss of a company car if it is making a payment in lieu of notice, it should exclude the right to be compensated for this in its contracts of employment.