Practical Law UK Glossary 2-200-3406 (Approx. 4 pages)
Glossary
Payment in lieu of notice (PILON)
A contractual right to pay an employee a lump sum rather than require them to serve out their statutory or contractual notice period.
If there is no PILON clause then an employer who pays a PILON instead of requiring the employee to serve their notice period will be in breach of contract, and the PILON therefore represents damages for that breach.