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When does a notice of termination take effect?

Updated: Feb 16

Informing an employee that a decision has been taken to dismiss them is usually quite straightforward: if they are on the premises, they are told about the decision verbally, with a confirmation in writing handed to them there and then.

But what if they are not physically present and the notice has to be posted to them? At what point will they have been informed of the notice to terminate their employment?

That’s what a recent case in the Court of Appeal, Newcastle Upon Tyne NHS Foundation Trust v Haywood [2017] set out to determine.

What happened?

Ms Haywood worked for the Newcastle upon Tyne NHS Foundation Trust. Under her Contract of Employment, she was entitled to 12 weeks’ notice of termination of her employment. On 1st April 2011, she was told she was at risk of redundancy.

During a redundancy consultation meeting on 13th April, Ms Haywood informed two representatives of the Trust and told them that she was on annual leave from 19th April to 3rd May and in Egypt from 19th-27th April 2011.

The day after her annual leave began, the Trust sent out three letters that confirmed Ms Haywood’s redundancy and gave notice to terminate her employment. As per her contract, the notice was 12 weeks and that meant, as far as the Trust was concerned, her employment would terminate on 15th July 2011.

The three letters were sent as follows:

  • One letter was sent by ordinary post but no attempt was made to find out whether it had been received or not.

  • 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 27th April but there was no indication as to whether Ms Haywood had read it.

  • The third letter was sent by recorded delivery to her home address. A delivery slip was left at the address as she was on holiday. Her father-in-law, who had been keeping an eye on things while she was away, found the slip and collected the letter from the sorting office, leaving it at the property on 26th April. When Ms Haywood came back from her holiday, it was the early hours of April 27th. She went straight to bed and did not read the letter until about half past eight that morning.

Normally, this would not have been a problem but the crucial factor in the case, which gave rise to the claim was that Ms Haywood was 50 on 20th July 2011. If she were made redundant after her 50th birthday, she would then be entitled to a pension that was significantly greater than she would otherwise have received.

For her employer to pay her the lower pension, notice would have to have been given by 26th April 2011, making the effective date of redundancy 19th July.

There was no specific mention in Ms Haywood’s employment contract about when notice was deemed to have been given. Her employer argued that termination should be assumed to have occurred twelve weeks after the date of issue or, alternatively, the date of receipt at Ms Haywood’s property.

Ms Haywood didn’t agree. She said that the effective date of termination should be treated as twelve weeks after she actually read the notice.

At the High Court

The High Court had to decide whether the clock started ticking on the 12-week period only once Ms Haywood had actually read the notice.

The Court looked at the three methods by which the Trust had attempted to communicate notice of termination. They decided that sending the notice by email could not be counted as effective since Ms Haywood had not given permission for communications to be sent to that address.

The Court went on to state that it was not enough to just post a notice of termination, although showing that a letter had been correctly addressed and properly stamped would enable a presumption of delivery to be made. However, it was not enough to presume that just because the letter had been delivered, the notice had been received by the employee.

They also said that the notice of termination sent by recorded delivery had not been received by Ms Haywood when it was left at her house on 26th April. Instead, they said that she had received it when she read it the following morning.

The High Court said that because there was no express term in the Employment Contract, the notice of termination was only effective when Ms Haywood opened and read the letter containing it. Because of this, the Court said that she had been employed on her 50th birthday and was therefore eligible for the higher pension benefit.

The Trust appealed.

The appeal

The Court of Appeal decided by a majority to dismiss the Trust’s appeal and uphold the High Court’s original decision. It said that where there was no explicit clause in the Contract of Employment, then the notice of termination had to be received by the employee (provided it is sent by post) to be effective.

What should employers do?

Employers should consider the following steps:

  • In the absence of a relevant provision in the employment contract, employers should communicate notice in person with written notice of termination given by hand.

  • When the contracts of employment are reviewed, make sure that they have a section on how notice will be given and when it is considered received.

  • If notice must be given, ensure that it is done according to any terms in the contract of employment.

  • If by some oversight, the contract does not have any terms relating to the giving of notice, the notice should be given to the employee in person.

  • If the notice date is critical to some other matter, the notice should not be entrusted to the postal system, but a courier or other personal service should be used instead, which can confirm receipt of the notice.

  • During the disciplinary process (or the redundancy consultation period), make sure that any periods of leave or times when the employee is not going to be available are discussed and noted.

  • Don’t just email notice and assume that it has been received at the other end; use a delivery and read/receipt notification, or ask the employee to personally acknowledge receipt of the notice.

  • If the notice is not critical to another matter, then the postal system can be used, but the notice should be sent by registered mail.

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