Notice and payment in lieu of notice (PILON)


What is Notice?

Notice is basically receiving a heads up from your employer about when your employment contract will end. You also owe your employer a duty to give notice if you are leaving the job. Neither you or your employer have a choice as to how much notice to give because it is written in law. As an employee, you have the benefit of two types of notice rights. Statutory notice which is set out in the Employment Rights Act 1996 (ERA 1996) and contractual notice which is set out in your employment contract. If your employer does not give you notice or pay you for your notice period you will have a claim for breach of contract.

Statutory minimum notice

Section 86 of the Employment Rights Act 1996 (ERA 1996) sets the minimum notice that you and your employer must give each other in order to end the employment contract.  This applies with the exception of situations where your employers conduct forces you to walk out of the job without notice (constructive dismissal) or where your conduct forces your employer to dismiss you without notice(summary dismissal). Overseas employees, some types of merchant seamen, armed forces, crown employees and parliamentary staff are excluded from the right to statutory notice.

The statutory minimum notice period is;


no minimum in the first month of employment

one week after continuous service between one month and two years

one week for each complete year of continuous service for service between two years and twelve years

12 weeks after twelve or more years’ continuous service

Under s86(3) ERA 1996 you and your employer can agree to waive your rights to statutory minimum notice, or agree to a payment in lieu of notice. Statutory notice is implied into the employment contract, and so if either you or your employer do not give the required notice there would be a claim for breach of contract.


Contractual notice

Contractual notice is the amount of notice that your employer can set out in your terms and conditions of employment. It can be longer than statutory notice. As an example the statutory notice you must give your employer is one week, but your employer can increase notice to one month in your terms and conditions of employment.


Dismissal on notice

See Termination of Employment 


Payment in lieu of notice

You can waive your right to the statutory minimum notice in s86 ERA 1996 and accept payment for the notice period. This means you leave the workplace immediately but are paid as if you were at work for the period when you would have been working out your notice. This is called payment in lieu of notice. If you are not paid for the notice period, you will have a claim for breach of contract in the employment tribunal. You must first go through free ACAS Early Conciliation.


Resources available

Disciplinary action and capability

Discrimination at work

Surviving a workplace suspension

Health and Safety Dismissal

How to fight dismissal on Probation

How to survive a criminal charge, conviction or caution at work

Social Media and Unfair Dismissal

Surviving a disciplinary investigation at work

Surviving Capability and Performance Management

The Disciplinary Hearing


How to use the discrimination questions procedure

How to write a grievance about discrimination at work

How to Write a Grievance About Unauthorised Deductions from Your Wages or Salary

How to Write a Grievance That Gets You What You Want

How to Write a Grievance About Bullying and Harassment at Work

How to Write a Grievance About Changes to Your Employment Contract

How to Write a Grievance About the Behaviour of a Colleague, Manager or Supervisor

How to write a Grievance about discrimination at work


ET1: Breach of Contract

ET1: Non-Payment of Holiday Pay on Termination

ET1: Non-Payment of Holiday Pay whilst still employed




Best of the web

ACAS – Notice periods and pay

Statutory or contractual notice

Understanding payment in lieu of notice (PILON)

GOV.UK – Handing in your notice

Citizens Advice – Basic Rights at work

– Notice of dismissal from work

WorkSmart – What notice do I have to give my employer if I want to leave

– My employer has handed me my notice. When does it take effect?

 – Dismissal with notice and without notice





This resource is published by Employee Rescue Limited. Please note that the information and any commentary on the law contained herein is provided for information purposes only. The information and commentary does not, and is not intended to, amount to legal advice. Employee Rescue accepts no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material contained in this publication.

Further specialist advice should be taken before relying on the contents of this publication. You can send an e-mail to for such specialist advice if required.


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