Notice Periods, Garden Leave, and PILON

Your statutory minimum notice period

By law, you are entitled to a minimum notice period based on how long you have worked for your employer:

• 1 month to 2 years of service: at least 1 week
• 2 to 12 years of service: 1 week per year
• 12 or more years of service: 12 weeks (maximum)

Your contract may specify a longer notice period — if so, the contractual period applies. The statutory minimum is the floor, not the ceiling.

Option 1 — Work your notice period

You work your full notice period, attending work as normal. Your employer continues to pay your salary during this time. This is the default if no other arrangement is specified in your contract.

Pros: You continue earning and building pension contributions. You have access to workplace resources and colleagues. You may be able to use company equipment for job hunting.

Cons: You may be excluded from team activities or feel marginalised during the notice period. Some employers require gardening leave during consultation anyway.

Option 2 — Garden leave

Garden leave means you are paid your full salary during your notice period but are required to stay away from work. You cannot do other paid work during this time. Your employer continues to pay you as normal, but you do not come into the office or access work systems.

Garden leave is most commonly used during the consultation period, particularly when there are concerns about the employee accessing sensitive information, influencing客户 relationships, or undermining the redundancy process.

Pros: You continue to receive full pay with no obligations. You have time to job hunt while still employed, which has benefits for your rights and status.

Cons: You cannot work elsewhere during garden leave. You may feel isolated from the workplace. Some people find being paid to do nothing stressful.

Check your contract — garden leave clauses are enforceable if written into your employment contract, even if you have not agreed to them explicitly at the time.

Option 3 — Payment in lieu of notice (PILON)

A PILON is a lump-sum payment your employer makes instead of requiring you to work your notice period. It is essentially compensation for the notice period you did not work.

A PILON is not the same as your redundancy pay — it is compensation for the notice period. Your contract will specify whether a PILON is available and how it is calculated. Some contracts include an explicit PILON clause; others do not.

• Contractual PILON: Your contract explicitly provides for a payment instead of notice. This is usually subject to Income Tax and National Insurance, like salary.
• Statutory PILON: If your contract does not include a PILON clause but your employer terminates without giving full notice, you may be entitled to a statutory notice payment — this is limited to a week's pay per week of notice owed, subject to the statutory weekly cap.

How PILON interacts with your redundancy pay

Your statutory redundancy pay is separate from any PILON you receive. They are not the same thing and are calculated differently:

• PILON: Compensation for notice period not worked — treated as earnings, subject to tax and NI
• Statutory redundancy pay: Compensation for years of service — the first £30,000 is tax-free
• Enhanced contractual redundancy: Any payment above the statutory minimum, treated as earnings for tax purposes

You can receive both a PILON and statutory redundancy pay — they are not mutually exclusive. Your P45 and final payslip should show each payment separately.

What your contract says

The key document is your employment contract. Look for the following clauses:

• Notice period — how much notice either party must give
• PILON clause — whether your employer can pay you instead of giving notice
• Garden leave clause — whether they can require you to stay away from work during notice
• Post-termination restrictions — non-compete or non-solicitation clauses that may be triggered during garden leave

If you do not have a copy of your contract, ask your HR department or line manager for the document. You are entitled to a written statement of your terms within 2 months of starting employment.