When does written termination take effect?

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When does written termination take effect?

When does written termination take effect?

The Supreme Court has recently held that, in the absence of an express contractual provision, written notice of termination served by an employer does not take effect until the employee has read it or has had a reasonable opportunity of doing so (Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood [2018] UKSC).

Mrs Haywood was dismissed by reason of redundancy by her employer the NHS Trust(the “Trust”). Although her contract of employment stated that she was entitled to a minimum period of notice of 12 weeks, it failed to state how such notice ought to be given. On 20 April 2011, the Trust sent a letter giving written notice of termination by recorded delivery to Mrs Haywood’s home address. As Mrs Haywood was away on holiday, she did not read it (nor did she have a reasonable opportunity of doing so) until 27 April 2011.

On the peculiar facts of the case, the date on which the notice period started was crucial. If it commenced on 27 April 2011 (the day she actually read the letter), Mrs Haywood would have been entitled to an early retirement pension.

Lady Hale highlighted that: “given the vast number of working people who might be affected by this issue, it is perhaps surprising that it has not previously come before the higher courts”. But what are the practical implications of this decision?

Firstly, this decision will not prevent the parties to a contract of employment from making express provision both as to how notice may or must be given and for when it takes effect.

Secondly, situations where an employee cannot be contacted (e.g. when the relevant employee is hospitalised or signed off work under a requirement that the employer does not contact him/her) remain a grey area, until further clarification will be provided by the courts in future cases. It is likely that the answer is connected to whether the employee has had a reasonable opportunity to read the letter. In other words, was the employee unable to read the letter due to a legitimate medical reason or could the employee not find the courage to open the letter?

Thirdly, this decision may produce a shift in the preferred means of giving notice of termination to employees. It is common HR practice for notices (regardless of their content) to be provided by letter as opposed to instantaneous means of communication. In order to achieve greater certainty and to avoid future litigation, employers may decide that communicating the news face-to-face (and simultaneously handing a written notice if so required) might be preferable, following this decision.

For more information on this article please contact Millie Kempley, or you can give us a call on 0345 070 6000.