Although an employment contract has to state the length of notice of termination, it does not have to state how notice should be given. In Newcastle upon Tyne NHS Foundation Trust v Haywood, the Supreme Court held that, as employers and employees need to know whether and when employment had come to an end, receipt of notice does not take effect until the employee has read it or had a reasonable opportunity of doing so.
On 20 April 2011, the Trust sent a letter by recorded delivery to Ms Haywood’s home address giving her written notice of termination by reason of redundancy. As she was away on holiday (which the Trust knew about) her father in law collected the letter for her from the sorting office and left it in her house. When she returned on 27 April, she read the letter.
Although her contract stated that she was entitled to 12 weeks’ notice, it did not state expressly how termination of notice should be given. This was crucial in terms of her pension because, if the date of delivery was deemed to be effective on the day she read it (making the date of termination after 20 July 2011 when she turned 50), she was entitled to a higher pension. If delivery was deemed effective before 27 April, she would only receive the lower pension.
In February 2012, Ms Haywood brought a claim that she had received insufficient notice of termination.
Decisions of High Court and Court of Appeal
The High Court judge held that, as notice had only been given once Ms Haywood had actually received the letter of dismissal (or had a reasonable opportunity to read it) on 27 April 2011, she remained employed by the Trust up to and including 20 July 2011.
Dismissing the Trust’s appeal, the Court of Appeal (by a majority) upheld the High Court’s decision that the contract contained an implied term that, for notice to have been effective, Ms Haywood had to have received the letter. She was therefore entitled to the higher pension.
The Trust appealed again on the basis that there was a common law rule (mainly derived from landlord and tenant cases) which provided that notice was given when the letter was delivered. Ms Haywood, on the other hand, argued that the Court should follow the approach of the EAT which was that notice should only take effect once the employee had received the letter and had either read or had a reasonable opportunity to read it.
Decision of Supreme Court
On the basis that it was important for both employer and employee, even in dismissal on notice cases, to know whether and when employment had come to an end, a majority of the Supreme Court held that receipt of notice by the employee was always required.
There was no reason why this approach should present employers with any real difficulties in practice, according to the Court, as they could either make express alternative provision in the contract or ensure notice of termination was received in sufficient time, or arrangements were made, to allow the employment to terminate on a specified day.
As Ms Haywood had not had the opportunity to read the letter until 27 April, her effective date of termination was therefore after 20 July and she was entitled to the higher pension.