When an employee does not have to work notice
Instead of working their notice period, an employee may:
- ask to leave during their notice period
- be offered payment in lieu of notice (PILON)
- be offered garden leave
Leaving during a notice period
The employee can ask if they can leave before their notice period ends.
They should get agreement from their employer in writing. If the employee does not get agreement to leave early they could be in breach of contract.
If the employee leaves early, the employer only has to pay them for the time that they’ve worked.
Payment in lieu of notice (PILON)
A clause in an employee's contract might allow payment instead of working their notice. This is called 'payment in lieu of notice' or 'PILON'. This means they would stop working straight away.
Depending on the wording of the clause, the employer might be able to insist on payment in lieu of notice.
The employer must give the employee full pay for their notice period. The contract will end straight away, so it's unlikely they'll have to provide other contractual benefits.
If it's not in the contract
The employer can ask the employee to agree to payment in lieu of notice.
If the employee agrees, the employer must give them full pay for their notice period. The employer might agree to provide other contractual benefits.
The employer cannot force an employee to agree to payment in lieu of notice if it's not in their contract.
An employee could make a claim to an employment tribunal for breach of contract if they're dismissed sooner than their notice period ends.
If you are an employer considering payment in lieu of notice and it's not in your employee's contract, you should get legal advice.
Garden leave (or gardening leave) is when an employer tells an employee not to work either part or all of their notice period.
This could be because the employer does not want the employee to have access to sensitive or confidential information they could use in a new job.
The employee must get paid as usual during their notice period, including for any work benefits in their contract.
The employee is still employed during garden leave, even though they're not working.