In this episode of Your Settlement Agreement Solicitor, Geoffrey Caesar explores the ins and outs of Payment in Lieu of Notice (PILON) when an employee is on long-term sick leave. A common question arises: if an employee is unfit to work due to illness, should PILON still reflect their full contractual salary, or should it be based on a reduced sick pay rate?

Geoffrey unpacks what PILON means and how it's typically calculated, emphasizing that, under UK employment law, PILON should be paid at the employee's usual salary regardless of sick leave. Employers choosing to end an employment contract through PILON are obligated to compensate for the full notice period, bypassing any reduced sick pay rates that might otherwise apply. Geoffrey also covers the distinction between PILON and working notice on sick leave, offering clarity on how these terms affect an employee’s final pay.

The episode concludes with guidance on what to do if there’s a dispute over PILON, highlighting the importance of reviewing employment contracts and, when needed, seeking legal advice to fully understand rights and obligations.

Tune in to learn why PILON protects employees financially even if they’re unable to work, helping both employees and employers navigate this often complex situation with confidence.