Termination of Employment on Date Exercise of PILON is Communicated

In Geys v Société Générale, London Branch [2010] EWHC 648, the High Court held that an employee's employment contract was not effectively terminated on the date his employer informed him in writing that he was summarily dismissed, nor on the date when the employer made a payment in lieu of notice to him. The contract remained in force until the date the employer's decision was unequivocally communicated to the employee that it was exercising its contractual right to terminate his employment summarily by a payment in lieu of notice.

Mr Geys worked for Société Générale until his employment was terminated "with immediate effect". He subsequently received a draft termination agreement and was told that the HR department would be contacting him separately regarding his notice pay. Mr Geys then received £31,899.29 paid directly into his bank account. He assumed that this was intended to be a payment in lieu of notice. Mr Geys' solicitors subsequently wrote to the bank to affirm his employment contract. The letter also referred to the amount paid into Mr Geys' bank account and reserved his position "in relation to acceptance of these monies once we understand what they constitute". On 4 January 2008, the bank wrote to Mr Geys stating that it had given notice to terminate his employment with immediate effect on 29 November 2007 and that payment in lieu of notice had been made to him on 18 December 2007.

The court held that Mr Geys' employment contract did not terminate on 29 November 2007, nor did it terminate on 18 December 2007 which was the date the payment in lieu of notice was paid into his bank account. Mr Geys' employment contract did not terminate until 6 January 2008, when he was deemed to have received the letter from the bank confirming that he had been paid in lieu of notice.