The Supreme Court considers when contractual notice of termination takes effect

The Supreme Court considers when contractual notice of termination takes effect

In the case of Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood, the Supreme Court held that, where notice of dismissal is sent by post and the employment contract is silent on when notice takes effect, the contractual period of notice only starts to run when the letter comes to the attention of the employee and they have read it, or have had a reasonable opportunity of doing so. 

 

Background

Mrs Haywood was employed by the Trust.  Her position was made redundant shortly before her 50th birthday.  If Mrs Haywood had been made redundant on or after her 50th birthday, she would have been entitled to an enhanced early retirement pension. 

On 20 April 2011, the Trust posted two letters to Mrs Haywood to give her 12 weeks’ notice of termination of her employment.  One was sent by first class post and the other by recorded delivery.  They also sent her an email but the Trust did not seek to rely on the email.  The Supreme Court only considered the letter sent by recorded delivery. 

Mrs Haywood was away on holiday and the postal service was unable to deliver the letter which had been sent by recorded delivery.  On 26 April 2011 Mrs Haywood’s father in law collected the letter from the sorting office and took it to Mrs Haywood’s house.  Mrs Haywood read the letter on 27 April 2018.  The key question was whether notice had been served on Mrs Haywood by 26 April 2018.  If it had, the notice period would have expired before her 50th birthday and she would not be entitled to the enhanced pension entitlement.

Mrs Haywood successfully brought proceedings in the High Court and successfully defended the Trust’s appeal in the Court of Appeal.  The Trust then appealed to the Supreme Court.

Decision

The Trust argued that there is an established principle that notice is given when the letter is delivered to the relevant address.  The Trust mainly based its argument on a number of historic landlord and tenant cases.  The Supreme Court disagreed.  It noted that the Employment Appeal Tribunal has taken the consistent approach since 1980 that notice does not take effect until it has come to the employee’s attention and the employee has either read it or had a reasonable opportunity to do so.  This, in the Court’s view, is the correct approach for a number of reasons.  These included the fact that there is no reason to believe that this approach has caused any real difficulties in practice.  Additionally, if an employer does consider that it would cause problems, it is always open to them to include provisions in the contract on the methods of giving notice and the time at which such notices would be deemed to be received.  On this basis, the Supreme Court dismissed the Trust’s appeal.

Comment

This case highlights the importance of ensuring clarity when giving notice of termination.  Employers would be well-advised in the interests of clarity to ensure that their employment contracts set out the position around service of notice.  Where it is essential that notice is given by a particular time, as was the case here, employers should also take into account any factors that may delay delivery of notice, such as the employee’s absence.  Practically speaking, in some circumstances, this may result in giving more notice than is contractually required, for example, in anticipation of an employee’s absence for a period.  Employers should also consider the best method of serving notice, whether by hand, by email or by different methods of post, depending on what is permitted under the contract.  Employers may wish to serve notice using more than one method, and the most appropriate method or methods would depend on the particular circumstances.

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