PILON stands for Pay In Lieu of Notice. Instead of placing the employee on Garden Leave or making them work their notice, the employer can end the contract of employment earlier by making a payment to the employee that is equivalent to the amount they would have received had they worked their notice.
This can be paid free of tax and national insurance contributions (i.e. Gross) where the employer has not reserved the right to make the payment in the contract of employment or where it is not paid by custom and practice. This is because by doing so the employer is breaching the employment contract and it is damages for breach of contract.
If the right to make the payment is reserved in the contract of employment or where it is paid by custom and practice, then the payment is subject to deductions and paid net.
A pre-hearing review is a hearing which deals with a preliminary issue in advance of a main hearing which deals with the substantive issues. Example: In a case of unfair dismissal a pre-hearing review could be used to deal with the issue of whether the Claimant was in fact an employee of the Respondent.
In simple terms this translates to mean “for this occasion”.
This principle is important in establishing vicarious liability.
In practice there are occasions when employers lend or hire employees to other employers (recipient employers). This is often for a particular purpose, for example to undertake specialist tasks. Usually the employee will continue to be employed by the original employer under the terms and conditions of his or her contract of employment, however, there are occasions when the employee will be deemed as being employed by the recipient employers.
To assess which employer is liable for the employee, the arrangements between the parties are looked at, with particular attention given to the party who controls the work that the employee undertakes. In the case of Sime v Sutcliffe Catering Scotland Limited [1990] IRLR 228 it was decided that the recipient employer was liable for the employee because the day to day management and control of the employee was undertaken by themselves.
