David in The Financial Times – Should Payment in Lieu Include Employer Pension Contributions?

Covid-19 resulted in a massive number of redundancies despite the extension of the furlough scheme to March 2021.

Where an employee is made redundant the employer can choose whether to pay basic entitlements such as notice, holiday and statutory redundancy (if over 2 years employment) or whether to make an enhanced package offer – perhaps subject to the employee signing a settlement agreement.

A question often asked by employees facing redundancy and, where the employer plans to pay the employee in lieu of them working their notice, is whether that notice payment should include benefits and (often valuable) employer pension contributions which the employer would otherwise have paid into their pension had they worked their notice period.

Read my comments in the FT here about how pensions contributions work in the context of redundancy and PILON.

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Posted on Wednesday 30th December 2020

This article/blog is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.