Contractual Notice: In the absence of an express term, when does notice of termination take effect?

Published 18 mayo 2018

If there is no express contractual term, contractual notice takes effect on the date when it comes to the attention of the employee and they have read it, or have had a reasonable opportunity to read it.

The facts

As reported in our alert last year, Mrs Haywood's employer, Newcastle Primary Care NHS Trust, decided to make her redundant. She had told the Trust that she would be on annual leave in Egypt from 19 April until 3 May 2011.

On 20 April 2011, the Trust sent three letters confirming her redundancy and purporting to terminate Mrs Haywood's employment with 12 weeks' notice, on 15 July 2011:

• One letter, incorrectly dated 21 April, was sent by recorded delivery and a slip was left at her 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 Egypt 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, and the date on which notice therefore began to run, was of vital 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. Mrs Haywood was therefore entitled to the higher pension. 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 (with one judge dissenting) dismissed the appeal. The Trust appealed to the Supreme Court. The Trust’s case was that there is a common law rule that written notice of termination is given when the notice document is delivered to the recipient’s address. Mrs Haywood’s case was that notice is received only when it has been received by the employee, and the employee has either read it, or had a reasonable chance of reading it.

The majority of the Supreme Court agreed with Mrs Haywood.

What does this mean for employers?

This case is a reminder for employers to ensure their contracts and practices around notice are clearly spelt out so that costly mistakes in timing are not made. In particular employers should:

• Ensure that their contracts of employment contain clear provisions setting out how notice should be given, and when it is deemed to have been received.
• Make sure that notice is given according to any contractual terms.
• If there are no contractual terms, where possible, give notice in person, to avoid confusion over when notice has been received.
• If the date on which employment terminates is critical and notice cannot be given in person, send the letter by courier.
• Where possible, during disciplinary/consultation meetings, ascertain if the employee is going to be on holiday at key times, and factor this into timetabling.
• If giving notice by email, set the email with a delivery and read receipt notifications. Ask the employee to acknowledge receipt.
• When posting notice, send it by registered mail.

Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood