No PILON in contract..Is it Breach of Contract

Northern_Jon

Guys

I'm due to be dismissed on the 22nd, effective on the 29th for not agreeing to new T&C's (see other thread) There is no PILON clause in my contract but I've noticed a clause in some paperwork I've received (not termination letter) It says:

"You will be required to work your first week of your contractual notice making your leaving date 29th September 2014. You will receive the remainder of your contractual notice as payment in lieu of notice. This would be paid in October 2014".

Is this Breach of Contract? As they are paying in lieu I will probably be denied my usual benefits for my notice period (company car / holiday accrual) up to which should have been my actual termination.

Just want to get my facts right..

Cheers

Jon

nodiscount

This might help:https://www.icaew.com/en/archive/library/subject-gateways/human-resources/dismissal/legal-alert/pilon-news-court-clarifies-rules

But if is normal practice in your place of work it may not be deemed to be a breach.
Any pilon that is not allowed in contract can be tax free.
If it is a breach, you could write to them and say that you expect pilon to reflect all your losses for not being able to work your notice, including company car and holidays, otherwise you will seek to recover the difference.

getmore4less

Holidays are not losses as it is always possible to take them(those that accrue during the period)

nodiscount

getmore4less wrote: »

Holidays are not losses as it is always possible to take them(those that accrue during the period)

It is a loss if you weren't able to accrue them because you were not able to work during that period and, the contract didn't allow for it.

Q: Do you have to include holiday in any payment in lieu of notice (“PILON”)?
Where there is an express PILON clause in the contract of employment, the amount due to the employee is calculated in accordance with the contract. An appropriately drafted PILON clause should limit payment to basic salary only. In such cases, the right to holiday pay is calculated up to the termination date, and the employee will have no right to accrue holiday (or to receive a payment in lieu of holiday that would have accrued) during what would otherwise have been the notice period. In the absence of a PILON clause, any payment in lieu is, in fact, a payment of damages for breach of contract and therefore should arguably include holiday pay which would have accrued during the notice period.

http://www.lexology.com/library/detail.aspx?g=2a2dd534-a8b1-404a-9825-feb4acc9ba8b

Undervalued

Northern_Jon wrote: »

Is this Breach of Contract? As they are paying in lieu I will probably be denied my usual benefits for my notice period (company car / holiday accrual) up to which should have been my actual termination.

It certainly could be.

I say could because an employment contract is more than just a piece of paper. Custom and practice within the company and information elsewhere, such as an employee handbook or website, can also form a part of your "contract".

In the absence of anything like this then, technically, it is breach of contract and potentially actionable. To be worthwhile you would need to have suffered a quantifiable loss of more than the cost of bringing a tribunal claim as costs are very rarely awarded. You would have had the "benefit" of being paid for your notice period without having to work so I would suspect this would reduce the chance of getting costs to near zero.

It is certainly worth demanding the money but I would wait until the end of the notice period incase they respond by insisting you work! How far you push it beyond that depends on the actual loss, hassle and risk.

Northern_Jon

Thanks for the responses guys. I'm only after what I'm owed / entitled to, no interest in a Tribunal if I can help it and the figures I'm talking about are not that large. But as I will be jobless, it'll all come in handy until I find another position.

If it is technically "Breach" then from what I've read I should be asking for payment to be made "tax free" as damages for the holidays and car I wont have access too.

Undervalued wrote: »

It is certainly worth demanding the money but I would wait until the end of the notice period incase they respond by insisting you work! How far you push it beyond that depends on the actual loss, hassle and risk.

Once I have my letter stating that my contract is terminated from the 29th (should have this around the 22nd and then leave on the 29th can they actually insist that I go back to work? As I'm not on garden leave, I've left the company (their choice). Similar if I gave my notice in and then changed my mind, they have no obligation to let me withdraw my resignation..

Cheers

Jon

Undervalued

Northern_Jon wrote: »

If it is technically "Breach" then from what I've read I should be asking for payment to be made "tax free" as damages for the holidays and car I wont have access too.



Once I have my letter stating that my contract is terminated from the 29th (should have this around the 22nd and then leave on the 29th can they actually insist that I go back to work? As I'm not on garden leave, I've left the company (their choice). Similar if I gave my notice in and then changed my mind, they have no obligation to let me withdraw my resignation..

Generally (although I'm not an accountant) anything you are contractually entitled to is taxable but compensation is not.

In practice, if they deduct tax, it will be up to you to reclaim it from HMRC if appropriate.

Regarding the notice.........

If they issue notice, and you point out to them that it breaches your contract, you can hardly complain if they withdraw it and act correctly! Obviously that could involve you working the full notice (in exchange for your normal salary and benefits). They could also refuse to allow you to take any holiday during the notice period but they would then have to pay you for it after you leave.

getmore4less

AIUI to resind the termination needs both parties.

things like compensation may not eg a redundancy can be withdrawn but the employee can still leave on the notice given without the redundancy


your combination would need research.