Q&A

Question: What is payment in lieu of notice?

Payment in lieu of notice relates to termination of an employee. When terminating an employee’s term of employment, you must provide them with the amount of notice set out by Fair Work Act 2009 (Cth), which depends on the amount of time they have been working for the business. In some circumstances instead of providing notice and having the employee work in the business for the period of time leading up to termination, the employer will provide the pay that the employee would have earned in that period of time so that they will discontinue work immediately. This is known as payment in lieu of notice.