An employee who has been wrongfully dismissed is entitled to compensation for the losses that result from their dismissal without proper notice. If the wrongfully dismissed employee ought to have received reasonable notice of their dismissal, then they will instead be owed ‘pay in lieu of reasonable notice’ as compensation for the dismissal.
Pay in lieu of reasonable notice is intended to compensate the employee for the salary and benefits that they would have received if they had been given proper reasonable notice.1
The amount that an employee is entitled to as pay in lieu of notice may be reduced in certain circumstances to avoid double compensation to the wrongfully dismissed employee. In particular, if the employee mitigates their losses by locating new employment, or if the employee fails to make reasonable efforts to locate comparable employment, then their claim may be reduced by the amount they can earn from the alternative employment during the reasonable notice period.