PILON and taxable benefits.

Aliboon

Hello all,

I'm being made redundant at the end of the year and have been paid off my 3 months notice and redundancy as a tax free lump sum.

My contract has no mention of PILON, so I assume that this is compensation for me for my employers breaching the terms of my contract.

Now, I have a company car, employer contribution pension and mobile phone and was wondering what the legal position of these were. As I understand it, if I were paying tax on the PILON (I'm not) then these would have to be compensated.

I asked about the pension contributions and was told that as I was getting a tax free lump sum, I was not entitled to these payments. Is this true?

If I were on proper (ie taxed) "gardening leave" then as I understand it, I would be entitled to the extra benefits (car, 'phone etc) or should at least be compensated for their loss. As I'm not paying tax on the PILON, do I lose entitlement to these other benefits?

Thanks in advance.

Ewarwoowar2

See thread "Holiday entitlement" for a debate on this issue.

Oh, I should say that the entitlement to a company car, pension contribuntions, etc is similar to contractual holiday entitlement.

My opinion is that you are right. Because your employer is breaching your contract, you are entitled to the losses that flow from the breach i.e. pension payments, etc. However, it is a bit of a gray area and different lawyers may have different opinions.