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In Geys v Societe Generale, it was held that an employer must specifically state when it is exercising its right to terminate an employees’ contracts with immediate effect. In order to terminate a contract lawfully in this manner, the employer must not only have a clause in the contract that allows them to terminate the contract and pay in lieu of notice, but they must also inform the employee that this is what they are doing.
In this case, Societe Generale called Geys to a meeting and informed hijm that he was being summarily dismissed. There was a valid PILON clause in the company handbook, but the bank did not expressly state that they were relying on that clause when they dismissed Geys.
Three weeks later, they paid three weeks wages into his bank account, which reflected his pay in lieu of notice, but they did not tell Geys specifically what it was for.
It was only two weeks later that the bank confirmed that they were exercising their contractual PILON right and as such, it was held that only then was Geys employment terminated.
