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Service of contractual notice deemed effective when received

In the case of Newcastle upon Tyne NHS Foundation Trust v Haywood, the Court of Appeal has upheld the county court judge’s finding that, in the absence of an express contractual term specifying when notice was to take effect, a letter giving contractual notice of termination would take effect when the employee took personal delivery of it.

Enhanced pension rights

When notice took effect was important in Haywood because, if the 12-week notice period concluded after 20 July 2011 (Ms Hayward’s 50th birthday), she would be entitled to an enhanced pension. The case is about contractual interpretation in the employment sphere; it is not concerned with the statutory provisions on when notice is deemed to take effect for the calculation of the limitation period for an unfair dismissal claim.

Naturally, there are wider implications than simply those in relation to enhanced pensions. It will also be relevant to other situations, such as what length of service should be used to determine an enhanced contractual redundancy payment.

Termination of employment

Ms Haywood’s contract contained a clause that read: “This employment may be terminated by the notice period as set out in section 1, subject to [the trust] giving you the minimum statutory period of notice.” The court found that it was necessary to imply a term into the contract permitting the parties to give notice in writing and by post. However, it was not possible to imply a term as to when that notice would take effect, as there were too many possibilities. The contract was silent on that point. Had it not been, the issue would have been avoided.

Ms Haywood had been out of the country on annual leave between 19 and 27 April, and the letter purporting to give 12 weeks’ notice was sent on 20 April. If notice had been served by 26 April, it would have expired before Ms Haywood’s 50th birthday.

The court held that “the letter of dismissal had to be actually communicated to the employee before it took effect.”

Contractually, physical delivery of a notice to the addressee’s home gives rise to a rebuttable presumption of receipt. On the facts of this case, Ms Haywood was able to rebut the presumption, as she had been in Egypt and had not read the letter until her return on 27 April.

Date of termination

One lesson for employers is to ensure that, if the date of termination is likely to be important for the purpose of determining contractual entitlements, a clause should be included in the contract as to when notice is deemed to take effect.

Another lesson that can be taken from the case is to considering the circumstances of notice being given. If the employee is going away on holiday or is away from home on business when notice is given, how can notice be communicated and what are the consequences of the chosen method of communication? A recorded delivery letter may seem more official, but it has to be signed for, whereas an emailed letter (to an address the employee is using) or even a telephone call (followed up in writing) may provide added certainty of the date from which notice runs.

For more information on any of the issues raised in this article, contact our Leeds Employment team.

Posted on Jul 11th, 2017 by Lyons Davidson

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