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Pay in lieu of notice what should it include?

(4 Posts)
MicroTablet Mon 22-Oct-12 13:53:14

Hi, my employer wants to pay me in lieu of my notice period. I was just wondering what that 'pay' should include. Purely salary? Or compensation for loss of benefits during what would have been my notice period too? My employment contract is unclear on this point.

In addition to my salary should the payment account for any of the following I would have had benefit of had I been allowed to work my notice period:
- accrued annual leave over the notice period?
- health insurance?
- use of company car?
- childcare vouchers?
- stock options that would have been granted during the notice period?
- bonus payment that would have been due during notice period?
- annual pay increment that would have been due during notice period?

Does anyone know?

wishingchair Mon 22-Oct-12 13:57:50

Are you being made redundant?

You should be entitled to loss of contractual benefits, and really holiday should continue to accrue too. Discretionary plans such as stock otpions, bonus payments, annual pay increases will most likely not be covered.

We provide higher than statutory redundancy pay which is intended to compensate for loss of benefits, and therefore don't provide any of the above.

Viviennemary Mon 22-Oct-12 14:01:18

Are you being made redundant. But as far as I know your employment will cease on the day you leave and you will be given the three months pay in lieu of any notice. So you wouldn't be entitled to payments which would be due in the three months unless you came to an arrangement. A lot of companies do give more than the statutory payments. Not sure about how holiday pay works.

flowery Mon 22-Oct-12 14:03:30

It depends whether your employer had the right to pay in lieu of notice under the contract.

If they don't, then paying in lieu is technically a breach of contract, and the payment basically constitutes damages for losses incurred as a result of that breach. Therefore should include an amount to compensate for loss of benefits, holiday that would have accrued etc.

If your employer is contractually entitled to pay in lieu, then it's contractually fine for your employment to terminate immediately and the payment wouldn't usually include holiday you would have accrued, or benefits you would have received.

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