What does Payment in Lieu mean?
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Best answer
It means that your employer will still make a payment after a notice period and don't have to work. It is also called pilon
Therefore, payment in lieu means getting paid for the remaining work days that you would be required to work if your contract was not being terminated. Instead of working, you get paid.
In leu simply means instead. It means to replace something or use something in place of another. For example, if you got to work during the weekend and then take 2 days off during the following week.
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It's a payment paid by an employer to an employee for a notice period during which the employee has been informed they are not required to work.
The word 'lieu' is usually written 'in lieu of' which literally means 'in the place of'. Thus, 'payment in lieu' means payment in the place of something else. It means foregoing something else so that you will rather be compensated with a money payment.
Payment in lieu" refers to receiving compensation or payment instead of something else. For example, if you can't take time off work, your employer might offer you payment in lieu of vacation days, meaning you get paid for those days instead of taking time off. It's essentially a substitute for something you would normally receive.
When an employer terminates the contract of an employee before the notice period is over, the employer has to pay the wages due to the employee. This is known as payment in lieu of notice. Example: The employee has tendered his resignation and has given 1 month's notice to the Company/employer but the employer wants the employee to leave immediately, he will have to pay 1 month's wages to the employee. This known as 'payment in lieu'
Lieu is French for place or stead. I would accept a cake in lieu of payment means you would take a cake instead of money for something you had done for someone.
- Marwa ZahidCertified Tesol Teacher
If a notice period is required for an employer to terminate a contract, a ‘payment in lieu of notice’ is immediate compensation at an amount equal to that an employee would have earned as a salary or wages through the whole notice period. for example, one months salary
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