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I am due to apply for PEO next week via, Tier 1 General --> ILR route.

All my absences are 90 days within 5 years period. out of which 20days are those when I was away while unemployed ( during job switching )

Do I need to provide employee letter for absences, although they are within limit?

No . Generally ,You don't . Nothing wrong in having it if you can get it easily otherwise don't bother.

Thanks and what about the period of absence (20 days ) while I was unemployed?