Payment in lieu of notice Hong Kong employment

Payment in Lieu of Notice Hong Kong

Payment in lieu of notice ends a contract immediately. The employer pays the employee to skip the contractual notice period. Under the Employment Ordinance (Cap. 57), this payment substitutes for the wages the employee would have earned during that time.

The contract must expressly grant the right to make payment in lieu of notice. If the contract is silent, the employer cannot impose it. Calculate the payment based on the employee's salary and wages for the full notice period, including any contractual benefits.

PILON Hong Kong

PILON is the standard abbreviation for payment in lieu of notice in Hong Kong. You will find it in termination clauses and settlement agreements. An employer who terminates without cause and without notice must pay PILON, unless the employee is summarily dismissed for misconduct.

Hong Kong Notice Period Pay

Notice period pay follows the Employment Ordinance. For an employee under a continuous contract, the minimum notice period is seven days in the first month, then one month. The payment in lieu must cover the full contractual notice period. The Labour Department provides guidance on the calculation method.

Employment Ordinance PILON

Section 6 of the Employment Ordinance addresses termination without notice. The employer may pay the employee a sum equal to the wages that would have accrued during the notice period. This payment is separate from any severance payment or long service payment that may be due.

Termination Notice Payment Hong Kong

A termination notice payment is required when an employer ends the employment contract immediately. It must include all wages, allowances and other sums the employee would have received during the notice period. The employer cannot deduct from this payment unless authorised by the Employment Ordinance or the contract.