EIM13892 - PENP formula: how to calculate ‘D’: examples

This page provides examples to support the explanations of how ‘D’ (see EIM13890 and EIM13892) is calculated for the purpose of the PENP formula (see EIM13880).

Example 1

An employee, having been employed for exactly one year, has their employment terminated on 25 November 2018. The employee’s employment contract does not provide any entitlement to a notice period. However, the employee is entitled to a statutory notice period of a minimum of one week. The employer terminates the employment without providing any notice. The employee’s last day of employment is the same day as the employment is terminated. The post-employment notice period is the number of days of notice the employee was statutorily entitled to but which was not provided. The post-employment notice period (‘D’) is 7 days.

Example 2

An employer gives notice to an employee on 18 June 2018 that their employment will be terminated on 25 June 2018. The employee’s employment contract provides entitlement to a minimum notice period of 30 days. The employee’s last day of employment is 25 June 2018. The post-employment notice period is the number of days of notice the employee was entitled to but which was not provided. The employee was entitled under his employment contract to receive 30 days of notice. They actually received 7 days of notice. The post-employment notice period (‘D’) is 23 days.

Example 3

An employee has a limited-term contract which will terminate on 3 October 2019 at the expiration of the fixed term. There is no provision within the employment contract for the employment to be terminated before the expiration of the fixed term. The employer terminates the employment on 4 September 2019. The employee’s last day of employment is the same day as the notice to terminate is given. The post-employment notice period is the number of calendar days from the end of the day the employment is terminated and the day of the limiting event. The post-employment notice period (‘D’) is 29 days.

Example 4

Following a disciplinary procedure for gross misconduct, an employer terminates the employment with immediate effect. The ‘earliest lawful termination date’ is the last day of the employment, so the number of days in the post-employment notice period (‘D’) is nil.