Statutory minimum notice periods are implied into every contract of employment. It is open to employers to agree longer periods of notice from either party where it is appropriate to do so. Occasionally, longer periods may also be implied where there is no express term, by virtue of the employee’s position, seniority or custom and practice. It is not necessary to have the same length of notice on either side, so for instance an employee may be entitled to receive 12 weeks’ notice but only have to give four.
It is customary to provide for payment in lieu of notice so that the employer may dismiss without requiring the employee to work their notice or placing them on garden leave. This ensures that any post-termination restrictions will not fail for breach of contract. However, it does mean that any notice payment made pursuant to such a contractual “PILON” will be taxable.