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Payments in lieu of notice (PILON) cover the sum a employer pays instead of requiring the employee to work through their notice period after termination. A solicitor practising this area drafts or negotiates PILON clauses, verifies the calculation, reviews the final settlement, and checks tax and National Insurance implications, offsets and any clawbacks. They manage correspondence with the employer, ensure the agreement is enforceable, and guide the client through the practical consequences of accepting a PILON payment and leaving the role.
A PILON arrangement involves drafting the clause, calculating gross payments, ensuring correct tax and NIC treatment, and handling any offsets or post-termination obligations. The solicitor negotiates terms with the employer, reviews the settlement for enforceability, and documents the agreement to prevent future disputes.
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