This is the most puzzling passage in the whole poem and generations of medieval scholars tried to decipher it. After all this moralizing that went on in the previous parts along the lines “work hard, pay your tithes and you will be saved”, Piers gets a letter of pardon from Truth absolving him from punishment and guilt, not only him but also his descendants and everyone who helps him. According to Catholic teachings, pardons could absolve one from punishment, but not from guilt – this could be done only through confession. So this is something way out of line, especially taking into account the collective nature of the pardon. But then something even stranger happens – a priest offers to translate the letter to Piers (because of course God writes in Latin) and he says that he sees no words of pardon here, just “do well, and God will reward you, do evil and God will punish you”. Piers then becomes very angry and tears the paper in two, saying that from that moment on he will stop working and start a religious life of prayer and penance. He’s not going to care about his food, in accordance with the line from Luke’s about birds which are fed by God. The priest notices that Piers is suspiciously well-versed in the Bible for an illiterate peasant and asks him who taught him. “Abstinence and Conscience”, answers Piers. They have some more Biblical banter which I don’t get, and then the narrator wakes up.
Now, what can this all mean? After what seemed like the promise of unconditional grace, Piers gets a message very similar to the general tenor of what was written in the previous passages. Why does he threaten to start some kind of contemplative religious life? Does he start to subscribe to the idea that the standard of “doing well” is so impossibly high that regular people can never be certain of their salvation and you have to become a monk to come even close? As for his banter with the priest, I have a gut feeling that it has something to do with the Lollards and John Wycliffe, who around that time advocated the translation of the Bible into the vernacular and letting the common people become acquainted with it directly.
Some critics point out that the letter may actually constitute a pardon, as it gives one simple directions to salvation. The priest reads “the letter that killeth”, while Piers grasps the spiritual meaning of the letter. So his tearing up the letter is a rejection of priestly authority and indicates his heretical tendencies. But perhaps he deliberately obfuscates it because he does not want to run into trouble with the authorities.