Payments In Lieu Of Notice

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The Court of Session has decided that an employer is not entitled to imply so-called Pilon clauses into contracts, in order to pay employees money in lieu of notice. Without an express term in the contract allowing the employer to do this, a breach of contract will have occurred.
In the case of Morrish v NTL a secretary's contract included a clause entitling him to 12 month's notice. Notice was not given, and money in lieu of notice was given instead. This had the effect of depriving the claimant of his bonus.
The Court decided that an employee living in the 21st century should not be subject to such an implied term in his contract, especially when this would serve to override the express term in his contract giving the the employee the right to receive twelve month's notice.

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Lawyers routinely use the threat of high costs to intimidate workers into giving up their claims at an early stage in a case. Apart from the psychological impact on claimants, this tactic often works and workers do withdraw their claims. Those representing workers' interests need to bring political pressure to bear to end this. As is the case in the Small Claims Court, the use of legal professionals in employment tribunals should not be encouraged .

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© Workrep 13 / 07 / 2007

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