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Employment Lawyers Compromise Agreements – Severance Compensation – PILON

June 13th, 2010 · 2 Comments · About Compromise Agreement Blog, Choosing an Independent Legal Advisor to provide Advice on the Terms of your Compromise Agreement, Compromise Agreement Solicitor, Compromise Agreement Solicitors, Compromise Agreements, Employment Lawyers, Employment Solicitors, National Insurance Contributions, Payment in Lieu of Notice, Payment Terms, Redundancy Pay, Settlement Payment, Severance Pay, Statutory Redundancy Pay, Taxation, Termination Date, Termination of Employment, Termination Payment, Your Compromise Agreement is a Binding Contract

We are receiving a number of enquiries where employers are only offering employees Payment in Leiu of Notice (PILON) as their compensation for loss of employment.  

Typically employers are paying Severance Compensation as follows:

  •  The employer will on its own behalf, and on behalf of all its associated companies, without any admission of liability whatsoever pay the employee £[anything up to 12/18 months salary] as compensation for loss of employment and in respect of the employee claims, less such deductions for tax and employee National Insurance contributions as are required by law.  This compensation is inclusive of a statutory redundancy payment of £[minimum statutory payment]calculated as follows:  £380 gross weeks’ pay x [number of years] complete years’ service x [x] age multiplier.
  •  In addition, the employer shall pay the employee the sum of £[contractual notice period] in lieu of  the employee’s contractual notice period, less normal deductions for tax and National Insurance contributions.

If you require further information please contact us at or visit one of the following pages on employment law:

© RT COOPERS, 2010. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.


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