Notice of termination of employment only effective once received by employee

Employment law is always throwing up interesting points for UK employment lawyers to consider – and learn from, and a recent case relating to notice of termination of Employment is no exception. In Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood, the Supreme Court decided that when notice of termination of Employment is sent to an employee by post, it is only effective once the employee has either read the notice or has had a reasonable opportunity to read it. This can have knock on consequences on termination benefits, as it did in this case – and potentially on the time limit for an Employment Tribunal claim. Given the impact of the case, London employment solicitors may be surprised that the point has not been considered by the courts before now!

Termination of Employment – giving notice

Most contracts of Employment will include a provision relating to giving notice of termination of Employment. Top employment solicitors will advise that in the absence of a contractual provision relating to notice, there is a statutory ‘default’ which requires an employer to give an employee a week’s notice, once the employee has worked continuously for a month or more. Once the employee has worked continuously for 2 years, he or she is entitled to 2 weeks’ notice from the employer, plus an additional week for every complete year worked up to a maximum of 12 weeks.

Employment claim solicitors will explain that there is no requirement for notice to be given in writing, whether statutory notice, or whether there is a contractual provision relating to notice. However, the best employment lawyers in London will concur that it’s wise for notice to be put into writing to avoid any confusion about the details. The written notice can be handed to the employee, but it can also be sent by post – and this is where difficulties may arise.

The facts in Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood

Mrs Haywood was dismissed by reason of redundancy. She was entitled to 12 weeks’ notice, but there was no contractual provision relating to how notice had to be given. Mrs Haywood was on holiday at the time the notice of termination of Employment was given – and her employer was aware of this. The employer sent the written notice of termination of Employment to her home address by recorded delivery on 20th April. In her absence, the letter was not collected until 26th April, when her father in law picked it up from the local sorting office. Mrs Hayward did not read the letter until 27th April.

In the majority of cases, the date the notice of termination commenced might not be material, but in this case it was of huge significance – Mrs Hayward’s 50th birthday was 20th July. At that date she became entitled to claim a non-actuarially reduced early retirement pension. If the notice of termination was given on 27th April or later, it would take effect on or after 20th July and she would be entitled to the pension. If notice was given before 27th April, she was not entitled to the pension.

The arguments before the Supreme Court

Before the matter reached the Supreme Court, both the high court and Court of Appeal had found in favour of Mrs Hayward – that the contents of the letter had to have been communicated to her for them (and therefore the notice of termination of Employment) to be effective. The dissenting judgment in the Court of Appeal, delivered by Lewison LJ found that Mrs Hayward’s father in law had acted as her agent, although little time was given to this point before the Court. The Supreme Court dealt with this at the outset and rejected this argument, finding that, on the facts,

“Mr Crabtree [the father in law] was not acting at Mrs Haywood’s agent for the receipt of the letter.”

With the agency point dealt with, the Supreme Court went on to examine the authorities referred to by the Trust and Mrs Hayward. The Trust relied on cases mainly from Landlord and Tenant law, to argue that there was a common law rule that notice is given when the letter is delivered to its address. Mrs Hayward’s lawyers relied on case law from the Employment Appeal Tribunal, starting with Brown v Southall & Knight and including McMaster v Manchester Airport plc, Edwards v Surrey Police, Gisda Cyf v Barratt and most recently Sandle v Adecco UK Ltd to argue that

“…in the absence of an express contractual provision to the contrary, there is an implied term that a notice served by an employer upon an employee takes effect only when it has actually been received by the employee and the employee has either read or had a reasonable opportunity of reading it…”

The Supreme Court’s conclusions

The Supreme Court concluded in favour of Mrs Hayward. There was no express contractual provision in the contract relating to how notice of termination should be given and no provision about when a written notice of termination sent was deemed to be delivered. In those circumstances, notice sent by post would only start to run once the notice had come to the attention of the employee and they have either read it or had a reasonable opportunity to do so. The dates when the letter was delivered or would have been delivered in the ordinary course of post are irrelevant.

Steps for employers to take

Given the decision of the Supreme Court in this case, employers might consider reviewing their contractual provisions relating to notice. They could consider whether to include specific provisions about methods for giving notice, and, if notice by post is to be permitted, to include provisions about when notice will be deemed to have been received – and so when notice will be deemed to start.

This decision may also have an impact on the time limit for bringing claims in the Employment Tribunal. Any case where the date of dismissal – the effective date of termination – is material for determining whether a claim is in time or not may be affected if notice has been given in similar circumstances.

OTS Solicitors are here to help with all aspects of employment law, whether you are an employer looking for ongoing support for your HR and management functions, or an individual looking to resolve an Employment issue with your employer. To book an appointment with one of our employment law team members, call 0203 959 9123.