Employment Law Cases

Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood

Where a contract is silent on when notice takes effect, it is effective when it’s actually received by the employee and they have read it (or had a reasonable opportunity to do so).

Although giving notice may seem a simple task, the timing of it can sometimes be crucial. For example, a later termination date may entitle the employee to receive a bonus, additional contractual entitlements or increased pension rights.

Background

Ms Haywood, a senior NHS director, was told in a meeting on 13 April 2011 that she was at risk of redundancy. She told the trust that she would be entitled to a higher NHS pension of about £200,000 if she was made redundant on or after 20 July 2011, her 50^th birthday. She also told them that she would be on annual leave from 19 April until 3 May and that she had booked a holiday in Egypt. Following the meeting, she went absent on sick leave and a few days later began her planned annual leave. On 19 April she flew to Egypt and returned home on 27 April.

The trust decided to make Ms Haywood redundant. She was entitled under her contract to 12 weeks’ notice, but there were no provisions specifying when that notice would be deemed to have been received. On 20 April, the trust sent her three letters: one by ordinary post, one by recorded delivery, and one by email to her husband’s email address. The letters said they were giving her 12 weeks’ notice of termination and that her employment would end on 15 July 2011 - five days before her 50^th birthday. Ms Haywood’s father-in-law collected the letter from the Post Office on 26 April and Ms Haywood read it when she got home on 27 April.

Ms Haywood claimed in the High Court that notice had not validly been given until she received and read the letters on her return from holiday on 27 April, and that the 12 weeks’ notice therefore ended on or after her 50^th birthday. On this basis, she was entitled to the higher pension. The High Court agreed with her, as did the Court of Appeal. The trust appealed to the Supreme Court.

Supreme Court decision

By a majority (3:2), the Supreme Court dismissed the appeal. It saw no reason to depart from a line of EAT case law stretching back to 1980 which consistently has held that written notice does not take effect until the employee has, or has had a reasonable opportunity, of reading it. Thus, for Ms Haywood, her notice did not take effect until 27 April and she was entitled to a higher pension.

The court commented that it did not believe that such an approach had caused any real difficulties in practice. In any case, it was always open to the employer to make express provision in the contract both as to the methods of giving notice and as to the time at which such notices are deemed to be received.

Link to judgment: http://www.bailii.org/uk/cases/UKSC/2018/22.html

Comment

This claim was not an employment claim; it was brought in the High Court as a breach of contract claim and so it was necessary for the Supreme Court to consider the matter for the first time and it expressed surprise that the matter had not come up before given the number of people potentially affected.

It is possible to write into a contract when notice takes effect. However, this is rarely done, and most contracts will say that the notice must be in writing and how long it must be, but do not make any provision for when it is deemed to have been received.

This is in contrast to the law on unfair dismissal where the Supreme Court decided in 2010 that the effective date of termination for the purpose of dismissal under the Employment Rights Act 1996 was the date that the letter is actually read by the employee.