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Pay in lieu of notice: Unpaid pay in lieu of notice was not recoverable as a debt

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    Cerberus Software Ltd v Rowley [2001] IRLR 160 CA (0 other reports)

Where a contract of employment provided that "the employer may make a payment in lieu of notice to the employee" (emphasis added) and the employer chose to summarily dismiss the employee without cause or pay in lieu of notice, the employee's claim was for damages for wrongful dismissal, subject to his duty to mitigate his loss, and not for a sum due under the contract, holds the Court of Appeal, by a majority, in Cerberus Software Ltd v Rowley [2001] IRLR 160. The contract gave the employer the right to elect whether or not to make a payment in lieu of notice. Its language was totally inconsistent with a contractual right given to the employee to insist that he be paid in lieu of notice.