Employee notice - a scenario
Discussion
Roger employs Peter. Peter is contracted for 35 hours a week (5x7) paid monthly. Any overtime is paid a month in arrears, so any overtime Peter did in December is paid in his January pay, etc. Peter gets 28 days paid leave per year. The holiday year runs from 1st May to 30th April. Holiday is accrued at 2.33 days per month. Peter's contract states he needs to give one month's notice. It also states any holiday taken but not accrued will be clawed back.
Last Friday (20th) Peter emailed Roger and tendered his resignation stating his last day of work would be February 16th. Roger asked where/what Peter was going to do next as their may be a conflict of interest if Peter was going to work for a competitor. Peter was evasive and refused to give a straight answer. On this basis Roger felt it unwise to let Peter work his notice and advised Peter that he didn't need to work his notice and therefore his employment was at an end.
Roger has paid Peter all his overtime for December and all his basic pay (he had no overtime) for January. He has also paid Peter pay in lieu of notice up to the 16th February. And has clawed back holiday pay for holiday taken but not accrued.
Roger is of the opinion he has been fair and has fulfilled his legal obligations to Peter.
Peter has emailed claiming he should have received pay to 20th February because his contract states one month notice. Peter also believes his holiday calculation is wrong because he believes his holiday pay should be calculated to 20th February.
Roger believes he can accept a shorter notice period (and has) and also PILON does not accrue holiday entitlement.
Peter has only been employed by Roger for 11 months if that us relevant.
So, has Roger acted correctly?
Last Friday (20th) Peter emailed Roger and tendered his resignation stating his last day of work would be February 16th. Roger asked where/what Peter was going to do next as their may be a conflict of interest if Peter was going to work for a competitor. Peter was evasive and refused to give a straight answer. On this basis Roger felt it unwise to let Peter work his notice and advised Peter that he didn't need to work his notice and therefore his employment was at an end.
Roger has paid Peter all his overtime for December and all his basic pay (he had no overtime) for January. He has also paid Peter pay in lieu of notice up to the 16th February. And has clawed back holiday pay for holiday taken but not accrued.
Roger is of the opinion he has been fair and has fulfilled his legal obligations to Peter.
Peter has emailed claiming he should have received pay to 20th February because his contract states one month notice. Peter also believes his holiday calculation is wrong because he believes his holiday pay should be calculated to 20th February.
Roger believes he can accept a shorter notice period (and has) and also PILON does not accrue holiday entitlement.
Peter has only been employed by Roger for 11 months if that us relevant.
So, has Roger acted correctly?
Jordie Barretts sock said:
Peter has emailed claiming he should have received pay to 20th February because his contract states one month notice. Peter also believes his holiday calculation is wrong because he believes his holiday pay should be calculated to 20th February.
Roger believes he can accept a shorter notice period (and has) and also PILON does not accrue holiday entitlement.
What foes the contract say about PILON?Roger believes he can accept a shorter notice period (and has) and also PILON does not accrue holiday entitlement.
Jordie Barretts sock said:
Contract says nothing about PILON.
Roger thinks the contract doesn't have to mention PILON.
What are you relying on then to pay PILON? Roger thinks the contract doesn't have to mention PILON.
Had you given notice as an employee and not paid benefits or holiday accrual for the notice period but only the salary that would be early how do you think a worker will think about that? How do you think a tribunal will see this?
The understanding is that an employer may not require the employee to work their notice because they may have access to sensitive material that the employer may not wish them to have. Therefore they may pay in lieu of notice. According to HMRC, PILON does not attract holiday accrual.
Effectively Peter has been paid not to work his notice. Why would there be a tribunal and on what basis?
Effectively Peter has been paid not to work his notice. Why would there be a tribunal and on what basis?
In my view, you can pay him and not require him to work, but you cannot PILON and refuse to accrue benefits as you have no basis to do so. You will be in breach of contract.
https://www.davidsonmorris.com/payment-in-lieu-of-...
ETA: Changed to better legal link
https://www.davidsonmorris.com/payment-in-lieu-of-...
ETA: Changed to better legal link
Jordie Barretts sock said:
Roger employs Peter. Peter is contracted for 35 hours a week (5x7) paid monthly. Any overtime is paid a month in arrears, so any overtime Peter did in December is paid in his January pay, etc. Peter gets 28 days paid leave per year. The holiday year runs from 1st May to 30th April. Holiday is accrued at 2.33 days per month. Peter's contract states he needs to give one month's notice. It also states any holiday taken but not accrued will be clawed back.
Last Friday (20th) Peter emailed Roger and tendered his resignation stating his last day of work would be February 16th. Roger asked where/what Peter was going to do next as their may be a conflict of interest if Peter was going to work for a competitor. Peter was evasive and refused to give a straight answer. On this basis Roger felt it unwise to let Peter work his notice and advised Peter that he didn't need to work his notice and therefore his employment was at an end.
Roger has paid Peter all his overtime for December and all his basic pay (he had no overtime) for January. He has also paid Peter pay in lieu of notice up to the 16th February. And has clawed back holiday pay for holiday taken but not accrued.
Roger is of the opinion he has been fair and has fulfilled his legal obligations to Peter.
Peter has emailed claiming he should have received pay to 20th February because his contract states one month notice. Peter also believes his holiday calculation is wrong because he believes his holiday pay should be calculated to 20th February.
Roger believes he can accept a shorter notice period (and has) and also PILON does not accrue holiday entitlement.
Peter has only been employed by Roger for 11 months if that us relevant.
So, has Roger acted correctly?
Peter said his last working day would be 16th so why is he now wanting to be paid up until 20th? It sounds like he was happy to give less than one month's notice but, now that he's getting PILON he wants paying for the full month.Last Friday (20th) Peter emailed Roger and tendered his resignation stating his last day of work would be February 16th. Roger asked where/what Peter was going to do next as their may be a conflict of interest if Peter was going to work for a competitor. Peter was evasive and refused to give a straight answer. On this basis Roger felt it unwise to let Peter work his notice and advised Peter that he didn't need to work his notice and therefore his employment was at an end.
Roger has paid Peter all his overtime for December and all his basic pay (he had no overtime) for January. He has also paid Peter pay in lieu of notice up to the 16th February. And has clawed back holiday pay for holiday taken but not accrued.
Roger is of the opinion he has been fair and has fulfilled his legal obligations to Peter.
Peter has emailed claiming he should have received pay to 20th February because his contract states one month notice. Peter also believes his holiday calculation is wrong because he believes his holiday pay should be calculated to 20th February.
Roger believes he can accept a shorter notice period (and has) and also PILON does not accrue holiday entitlement.
Peter has only been employed by Roger for 11 months if that us relevant.
So, has Roger acted correctly?
The PILON does NOT need to include an amount for holiday pay. The decision as to whether to pay up to 16th or 20th is a judgement call. It might make sense to pay up to the 20th rather than have to go to ET.
CharlesElliott said:
In my view, you can pay him and not require him to work, but you cannot PILON and refuse to accrue benefits as you have no basis to do so. You will be in breach of contract.
https://www.davidsonmorris.com/payment-in-lieu-of-...
ETA: Changed to better legal link
https://www.davidsonmorris.com/payment-in-lieu-of-...
ETA: Changed to better legal link
Your HR link said:
Payment in lieu of notice does not have to include holiday that would have accrued during the notice period, i.e. beyond the date of termination, unless the contract provides otherwise.
I may have misunderstood your post - the Employer does NOT have to pay holiday pay beyond the date of termination.Jordie Barretts sock said:
The understanding is that an employer may not require the employee to work their notice because they may have access to sensitive material that the employer may not wish them to have. Therefore they may pay in lieu of notice. According to HMRC, PILON does not attract holiday accrual.
Effectively Peter has been paid not to work his notice. Why would there be a tribunal and on what basis?
Because you have denied him the contractual work and earnings that go with that. Had you used garden leave instead the original termination date would stand, you achieve the objective of having the employee away from the office and they want what they would have. Effectively Peter has been paid not to work his notice. Why would there be a tribunal and on what basis?
Countdown said:
Peter said his last working day would be 16th so why is he now wanting to be paid up until 20th? It sounds like he was happy to give less than one month's notice but, now that he's getting PILON he wants paying for the full month.
The PILON does NOT need to include an amount for holiday pay. The decision as to whether to pay up to 16th or 20th is a judgement call. It might make sense to pay up to the 20th rather than have to go to ET.
That is Roger's understanding. Roger doubts it will go as far as ET because he suspects Peter will be on the phone to ACAS first thing tomorrow. Ultimately if ACAS say that Roger should pay Peter up to 20th, then he will. The PILON does NOT need to include an amount for holiday pay. The decision as to whether to pay up to 16th or 20th is a judgement call. It might make sense to pay up to the 20th rather than have to go to ET.
edc said:
Because you have denied him the contractual work and earnings that go with that. Had you used garden leave instead the original termination date would stand, you achieve the objective of having the employee away from the office and they want what they would have.
No, GL means he still has access to the company information. He has not suffered financially by being paid PILON. Also, Roger is of the opinion that Peter would 'chuck sickies' as and when he felt like it if he worked his notice. Roger feels a clean break is much less stressful. Jordie Barretts sock said:
Countdown said:
Peter said his last working day would be 16th so why is he now wanting to be paid up until 20th? It sounds like he was happy to give less than one month's notice but, now that he's getting PILON he wants paying for the full month.
The PILON does NOT need to include an amount for holiday pay. The decision as to whether to pay up to 16th or 20th is a judgement call. It might make sense to pay up to the 20th rather than have to go to ET.
That is Roger's understanding. Roger doubts it will go as far as ET because he suspects Peter will be on the phone to ACAS first thing tomorrow. Ultimately if ACAS say that Roger should pay Peter up to 20th, then he will. The PILON does NOT need to include an amount for holiday pay. The decision as to whether to pay up to 16th or 20th is a judgement call. It might make sense to pay up to the 20th rather than have to go to ET.
ACAS will give a view for Peter on what the claim may be. Peter can then submit a claim and Roger will be notified later and meanwhile incur further cost. ACAS will attempt to mediate and resolve but if no resolution and Peter is steadfast then off to ET you go.
Not at all. Roger has had dealings with ACAS before. They have been very useful in managing disgruntled ex employees expectations before. Roger says that often the ex employee 'enhances' their grievance - lies, basically.
Roger would actually like ACAS to become involved. He says he would contact them himself tomorrow, but suspects Peter will do it for him.
Roger would actually like ACAS to become involved. He says he would contact them himself tomorrow, but suspects Peter will do it for him.
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