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  • FIRST POST
    • Getting confused
    • By Getting confused 9th Apr 18, 10:39 PM
    • 1Posts
    • 0Thanks
    Getting confused
    PILON Questions
    • #1
    • 9th Apr 18, 10:39 PM
    PILON Questions 9th Apr 18 at 10:39 PM
    Hello!

    I have recently found out my role is at risk of redundancy. I am entitled to 12 weeks statutory notice due to length of service. My contract has a PILON clause which states The Company also reserves the right, at its sole and absolute discretion, to pay salary (based on the basic salary set out in the employment contract) in lieu of any required period of notice.

    The questions I have are:

    1. Does this PILON clause mean that benefits above basic salary will not be paid or should the clause have said to pay salary based on basic salary ONLY?

    2. The statutory notice of 12 weeks would take me passed an anniversary to 19 years service. By having the PILON clause does this cancel the relevant date for redundancy calculations or would the statutory 12 weeks notice need to be added to the termination date to calculate the relevant date.

    Thank you in advance for any help given!
    Last edited by Getting confused; 09-04-2018 at 10:43 PM. Reason: Correcting typo
Page 1
    • getmore4less
    • By getmore4less 10th Apr 18, 8:51 AM
    • 32,042 Posts
    • 19,226 Thanks
    getmore4less
    • #2
    • 10th Apr 18, 8:51 AM
    • #2
    • 10th Apr 18, 8:51 AM
    PILON should compensate for the loss of earning during notice.
    the clause if written properly makes the contractual payment basic pay
    loads of info on the web a couple of examples
    http://www.acas.org.uk/index.aspx?articleid=4540
    http://www.darlingtons.com/blog/pay-in-lieu-of-notice


    The date used for redundancy service calculations is the termination date or notice date+statutory notice whichever is the later.

    They can't change that for a statutory payment, if it goes over a birthday that can also change the calculation adding another 1/2 week

    For a enhanced payment the company has some leeway as long as they pay at least the statutory.
    • langsmith
    • By langsmith 17th Apr 18, 11:23 AM
    • 80 Posts
    • 27 Thanks
    langsmith
    • #3
    • 17th Apr 18, 11:23 AM
    • #3
    • 17th Apr 18, 11:23 AM
    I received the maximum allowed under PILON. IIRC, 30k tax free (2010).
    • antrobus
    • By antrobus 17th Apr 18, 4:23 PM
    • 15,617 Posts
    • 22,269 Thanks
    antrobus
    • #4
    • 17th Apr 18, 4:23 PM
    • #4
    • 17th Apr 18, 4:23 PM
    I received the maximum allowed under PILON. IIRC, 30k tax free (2010).
    Originally posted by langsmith
    PILON is now taxable. As from 6 April 2018.

    All payments in lieu of notice will be treated as earnings and therefore subject to tax and class 1 NICs. This is irrespective of whether there is a PILON clause in the contract of employment.

    https://www.employmentlawworldview.com/tax-treatment-of-termination-payments-changes-from-april-2018-hit-employers-again/
    • getmore4less
    • By getmore4less 17th Apr 18, 4:56 PM
    • 32,042 Posts
    • 19,226 Thanks
    getmore4less
    • #5
    • 17th Apr 18, 4:56 PM
    • #5
    • 17th Apr 18, 4:56 PM
    Many PILON payments were contractual without a clause so should have been taxed.
    • Peelerfart
    • By Peelerfart 17th Apr 18, 8:55 PM
    • 1,913 Posts
    • 1,671 Thanks
    Peelerfart
    • #6
    • 17th Apr 18, 8:55 PM
    • #6
    • 17th Apr 18, 8:55 PM
    My PILON payment was subject to tax/NI in the normal way (2017)
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