Timing of Notice of Termination
25 April 2018
Where an employment contract is silent on when notice is deemed to be given, when does notice of termination take effect? Is it:
(i) when the letter would have been delivered in the ordinary course of post;
(ii) when it was in fact delivered to that address; or
(iii) when it comes to the attention of the employee and s/he has read it (or had a reasonable opportunity to do so)?
The answer is (iii), ie when it is actually received by the employee and s/he has read it (or had a reasonable opportunity to read it), held the Supreme Court in Newcastle Upon Tyne NHS Foundation Trust v Haywood, upholding the Court of Appeal's decision by a majority of 3 to 2.
In April 2011, Ms Haywood was told she was at risk of redundancy. She turned 50 on 20 July 2011. Redundancy after her 50th birthday would have entitled her to a considerably more generous pension than redundancy beforehand. Ms Haywood was contractually entitled to be given 12 weeks’ notice, but her contract was silent about how notice was deemed given.
On 19 April 2011, Ms Haywood went on holiday. On 20 April, her employer sent notice of termination by recorded delivery and ordinary post. She read it on her return from holiday, on 27 April.
If delivery was deemed effective before 27 April, she would have received the much lower pension. But if it was deemed effective on the day she returned from holiday and read it, she would have received the much more generous pension.
The majority of the Supreme Court held there was no good reason to disturb the long-standing line of caselaw from the EAT. The notice was only deemed effective when it was read by the employee (or s/he had a reasonable opportunity to read it). Thus it was not deemed effective until 27 April, and she was entitled to the higher pension.
With thanks to Daniel Barnett's Employment Law Bulletin for providing this update.