Dismissal – The date of dismissal when there is a PILON involved

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Posted on 15 Apr 2011

In Société Générale v Geys, the Court of Appeal has found that an employee’s contract of employment terminates on the date that the pay in lieu of notice money was paid into the individual’s bank account.  The Court found that there is no need for an employer to communicate its decision to terminate an employee’s employment, when there is a payment in lieu of notice clause in the employment contract.  The question was when was Mr Geys dismissed? In this case Mr Geys was not aware that the payment had been made for some time and that his employment had terminated.  However the employer had utilised its contractual entitlement and therefore the termination was effective when the PILON money was paid in.  Despite the judgment of the Court of Appeal, the case demonstrates the importance of clearly stating the position at termination.  If the employer wishes to rely on making payment in lieu of notice, then they should clearly state this in writing, together with the contractual provision which they are relying on.  This should then prevent confusion of this sort occurring.

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