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When does notice of termination take effect?

Napthens - May 23rd 2018

The recent case of Newcastle Upon Tyne NHS Foundation Trust v Haywood has confirmed when notice of termination is deemed to take effect when an employer serves notice on an employee, should the contract of employment be silent on the matter. The Supreme Court determined that it must choose between three possibilities:

  1. When the letter would have been delivered in the ordinary course of post;
  2. When it was delivered; or
  3. When it came to the attention of the employee and was read (or they had reasonable opportunity to do so).

The Supreme Court held that the correct date of effect was the date in which it came to the attention of the employee and they had read it (or had reasonable opportunity to do so).

The Case

In April 2011, Ms Haywood was told that she was at risk of redundancy. Importantly, 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 entitled to 12 weeks’ notice, but her contract was silent on how notice was deemed served.

Later that month, Ms Haywood went on holiday. However, the following day her employer sent notice of termination to her by standard and recorded delivery. This was subsequently read on her return, on 27 April.

Therefore, this gave rise to the question of when the notice of termination was deemed served. If deemed served before 27 April then Ms Haywood would have been entitled to a much lower pension than she would be had the notice been served on or after 27 April.

The Supreme Court held that there was no reason to go against established case law. Consequently, notice is deemed served when it has been read by the employee (or they have had reasonable opportunity to do so).

What Should You Do?

Many employers already have a clause in their contract of employments stating when notice is deemed to have been served. Therefore, little needs to change other than ensuring you take note and consider these clauses when issuing notice of termination to your employees.

However, you should take care when making an employee redundant via posted letter, rather than in person. In practice the employee should be given reasonable opportunity to read the letter. This is of particular importance in cases similar to this one, where the employee is on holiday and wouldn’t reasonably be expected to have read the letter until they had returned home.