Definitions

severance-pay

Pay in lieu of notice

In the United Kingdom, if an employer dismisses an employee without giving the requisite notice pursuant to law or the employee's contract, the employer should pay in lieu of notice. ‘In lieu’ means ‘instead of’. This is also called severance pay. The only exception to this is when an employee has been dismissed because of gross misconduct.

The amount of pay in lieu of notice one should be afforded depends on the extent of notice required. Employees should get pay in lieu at the rate of their normal wages. For example, if a worker is entitled to four weeks' notice, but is only given one, he or she will be entitled to three weeks’ pay in lieu of notice, or possibly more depending on the terms of the employment contract.

People often have problems with notice of dismissal. These are often to do with notice and sickness, maternity leave and holidays. If employees are experiencing problems with notice, they should consult an experienced adviser. For example, Citizens Advice Bureau.

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