Can someone explain this part of a contract to me please?

[Guest]

• The Company reserves the right to give the Employee pay in lieu of any notice of termination (whether given by the Company or by the Employee). For this purpose, a payment in lieu will consist of the Employee’s basic salary for the relevant period of notice and will exclude any bonus and any other emolument referable to the Employee’s employment. For the avoidance of doubt, the right of the Company to make a payment in lieu of notice does not give rise to any right of the Employee to receive such a payment.

[ULA]

It means that if you or the company terminate your employment then the company may ask you not to work your notice period and they will instead pay you for it - that is the pay in lieu of notice bit.

It then confirms the basis on which you will be paid which is only your basic salary due for the period of your notice so if you had 4 weeks notice that is what your pay in lieu amount would be and if you were eligible for a bonus or commission for example you would not get those payments.

Final bit is the fact that the company can make a payment in lieu of notice does not mean that you have the right to the payment, they can ask you to work your notice. Or if you were summarily dismissed for gross misconduct you would not have any entitlement to pay in lieu of notice.

Hope that explains it.