Supreme Court delivers significant termination notice ruling

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If an employee is dismissed by written notice posted to their home address, when does the notice period begin?

Is it from the date the letter was delivered or from when the employee actually read it?

Mrs Haywood worked for the NHS for more than 30 years. On 13 April 2011 she was informed that she might be made redundant following the merger of two NHS bodies. Both parties knew that if her employment terminated before her 50th birthday she would not be entitled to receive an early retirement pension worth approximately £400,000.

Haywood was entitled to 12 weeks’ notice and the crucial date was 27 April. Notice given on or after that would expire on or after her 50th birthday and would trigger her right to receive an early pension.

Haywood had pre-booked an overseas holiday from 18 April to 27 April. The Trust issued written notice to terminate her employment on 20 April, which it sent by recorded delivery to her home and by email to her husband’s email address. Haywood’s father collected the letter from the Post Office on 26 April and she opened it when she returned home the following day. Her husband read the email notice on 27 April.

The Trust argued that the notice was effective from the date of delivery (which in this case was 26 April), but Haywood argued it was effective from the date she actually read it (the following day). The High Court and Court of Appeal ruled in Haywood's favour so the Trust then appealed to the Supreme Court.

By majority the Supreme Court decided that, at common law, notice could only run from the date an employee receives written notice of their dismissal and has had a reasonable opportunity to consider it. This interpretation will now be implied in every contract of employment unless the contract between the parties expressly provides for a different interpretation.

What is reasonable will depend on the circumstances. For example, if Haywood had returned from her holiday a day earlier but chose to avoid opening the letter of dismissal to improve her financial position her claim would have failed.

Implications for employers

The relationship between employer and employee is primarily a contractual one governed by the terms and conditions agreed between them, and usually contained in an offer letter or written contract of employment. These are known as express terms. In addition, terms can be implied in a contract – for example where the express terms are incomplete, or where the parties have failed to include something that the law considers they intended to include.

Employers should make sure that their employment contracts set out how notice can be served and when it will be considered to have been received. If Haywood’s contract had said that written notice will be deemed to have been sent by first class post 48 hours after the time of service, or if sent by email 24 hours after sending, the Trust would have been able to terminate her contract before her 50th birthday and avoid triggering her entitlement to receive an early pension.

Alan Lewis is an employment partner at law firm Irwin Mitchell

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