Case update (3): Contracts of employment – When does notice take effect?

Summary:  Does notice of termination take effect on posting, delivery, or personal receipt of the notice if the employment contract is silent on this point?

On personal receipt, held the Court of Appeal in Newcastle Upon Tyne NHS Foundation Trust v Haywood, available here.

Facts:  The employee, Mrs Haywood was made redundant by her employer, Newcastle Primary Care NHS Trust. Mrs Haywood had told the Trust that she would be on annual leave from 19 April until 3 May 2011.

On 20 April 2011, the Trust sent three letters confirming redundancy with 12 weeks’ notice which the Trust said would expire on 15 July 2011:

• One letter was sent by recorded delivery and a slip was left at Mrs Haywood’s house on 21 April. Her father-in-law collected the recorded delivery letter from the sorting office on 26 April and left it at her home on the same day. Mrs Haywood returned from holiday in the early hours of 27 April, went to bed and subsequently read this letter at about 8.30am on 27 April.
• One letter was sent by standard mail. No findings of fact were made as to when this was received.
• One letter was sent by email to Mrs Haywood’s husband’s email address. Mrs Haywood’s husband read the email at 10.14am on 27 April.

Mrs Haywood’s contract of employment did not stipulate when notice given under the contract would be deemed to be received.

The question of when the notice was deemed to be received was of high importance for Mrs Haywood (and for the Trust). If her notice period expired after her 50th birthday, she would be entitled to a higher pension. For this to happen, notice of termination had to be given after 26 April 2011.

The High Court found that, in the absence of an express term, the notice was only effective once Mrs Haywood had actually read a letter of dismissal, so that the contents were communicated to her. This was on 27 April 2011, upon her return from holiday. This finding was based on the High Court’s construction of the wording of her contract which set out the length of the notice period.

The Trust appealed and the Court of Appeal dismissed the appeal.

The Court of Appeal held that, in the absence of an express contractual term specifying when a notice of termination is effective, the notice takes effect from the date it is received by the employee in the sense of them having personally taken delivery of the letter containing it. In this case this was the day Mrs Haywood opened and read the notice (27 April) meaning she was entitled to the higher pension.

Implications:  This case serves as a reminder of the importance of express contractual provisions to provide both parties with certainty when issuing notice of termination of an employment contract, particularly where (as in this case) the date of termination is critical.

Often employers send notices of termination either by ordinary post or by recorded delivery. This case illustrates the fact that the notice will not necessarily be effective until it is actually received and read by the employee and this can create uncertainty, particularly where the employee is away from home or claims to have been away and not read the letter giving notice of termination until a later date.

In order to provide certainty in these situations it is best where possible to give notice in person or, if this is not possible, contact the employee by telephone to issue notice verbally and state that a letter confirming the notice of termination is being sent to them. If giving notice by email, set the email with a delivery and read receipt notifications and ask the employee to acknowledge receipt.