When does Notice to Terminate take effect?

By Lupton Fawcett’s employment senior solicitor, Hannah Boyne.

From time to time an employer may have to terminate an employee’s employment. Many will do so face to face. Others may take time to reflect before arriving at their decision and writing to the employee concerned. The question then arises as to when termination takes effect. This is important as it can affect the risk of claims the employer may face and liabilities incurred.

This was the question considered recently by the Supreme Court in Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood (2018) UKSC22.  

Ms Haywood was issued with written notice to terminate her employment on the grounds of redundancy. Under her contract of employment, she was entitled to receive 12 weeks’ notice. The contract also provided that, if her employment terminated by reason of redundancy on or after her 50th birthday, she was entitled to an enhanced early retirement pension. Her 50th birthday was 20 July 2011.

The Trust issued written notice to terminate on 20 April 2011, and sent a letter to Ms Haywood by recorded delivery giving her 12 weeks’ notice. If this notice was effective, her employment would be deemed to have terminated on 15 July 2011, and she would not have been entitled to the enhanced early retirement pension.

Ms Haywood was, however, on holiday at the time.  She did not read the letter until 27 April, when she returned home.

The main issue therefore was whether 12 weeks’ notice had been served by 26 April 2011. If it had, the notice period would have expired before Ms Haywood’s 50th birthday, meaning that she would miss out on the enhanced pension entitlement.

The Supreme Court concluded that when written notice is sent by post, and in the absence of a written term in the contract setting out when notice would take effect, the notice period starts to run when the letter comes to the attention of the employee and they have either read it or had a reasonable opportunity of doing so.

The Supreme Court rejected the argument that the notice would start to run when the letter would have been delivered in the ordinary course of post, and also rejected the argument that notice would start to run when it was in fact delivered to that address.

This case suggests that if an employer is going to dismiss an employee, it may be best to inform the employee in person, and follow up with written confirmation. It is important to check that the employee has received the decision.  This will be particularly important if an employer is seeking to dismiss before a particular date for contractual purposes (as in the above case where enhanced pension entitlements were at play).

Alternatively, employment contracts could be drafted to contain a clause identifying when notice is deemed to take effect to help to avoid any ambiguity.

For further help or advice please contact Lupton Fawcett’s senior solicitor, Hannah Boynes, on 0113 280 2058 or Hannah.boynes@luptonfawcett.law

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