Rarely can the answer to the question “when does a notice period begin to run?” have been more starkly illustrated than in the case of Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood which was decided by the Supreme Court last month.
The facts – in outline
- Mrs Haywood was employed by the NHS Foundation Trust (“the Trust”). Her employment contract said two things in particular.
- First, that her employment could be terminated by a minimum notice period of 12 weeks – although the contract did not specify how such notice should be given.
- And, secondly, that if her employment terminated by reason of redundancy on or after her 50th birthday – which was on 20 July 2011 – she would be entitled to a non-reduced early retirement pension. But, if it terminated before that date, she would not.
- On 20 April 2011, the Trust sent a letter giving written notice of termination by recorded delivery to Mrs Haywood’s home address. The Trust was aware that Mrs Haywood was away on holiday. The letter was collected from the local sorting office by her father-in-law on 26 April 2011 and left by him in her house that day.
- She returned from holiday abroad on 27 April 2011 and read the letter.
The key question and its ramifications
- The key question was: when does the notice period begin to run where an employee is dismissed on written notice posted to her home address?
- If the answer was not specified in the contract of employment contract, was it (i) when the letter would have been delivered in the ordinary course of post?; or (ii) when it was in fact delivered to that address?; or (iii) when the letter comes to the attention of the employee and she has either read it or had a reasonable opportunity to do so?
- In this case the date on which the 12 week notice period started to run was crucial. If the notice period only began on 27 April 2011, it would expire on 20 July 2011, the date of Mrs Haywood’s 50th birthday so that she would be entitled to claim a non-reduced early retirement pension.
- If however the notice period began earlier than 27 April then it would expire before her 50th birthday and so she would not be entitled to a non-reduced early retirement pension.
The Trust’s main argument
- The Trust argued that there was a common law rule, principally derived from some historic landlord and tenant cases, which supported its case that notice was given when the letter was delivered to its address. Accordingly, the notice expired before Mrs Haywood’s 50th birthday and so she was not entitled to a non-reduced early retirement pension.
Mrs Haywood’s main argument
- Mrs Haywood argued that the common law rule was not as clear cut as the Trust said it was. Further, there was a consistent line of Employment Appeal Tribunal decisions which said that, in the absence of an express contractual provision to the contrary, there was an implied term that a notice served by an employer upon an employee took effect only when it had actually been received by the employee and the employee had either read or had a reasonable opportunity of reading it.
The Supreme Court’s decision
- The court (by a three to two majority) decided that the notice period only began on 27 April 2011 when Mrs Haywood actually read the letter. So, the 12 week notice period did not expire until Mrs Haywood’s 50th birthday and she was therefore entitled to a non-reduced early retirement pension.
The court’s reasons
The court’s main reasons may be summarised as follows:
(1) The non-employment law cases do not suggest that the common law rule was as clear and universal as the Trust suggested.
(2) Employment Tribunals have been consistent in their approach to notices given to employers since 1980. These are expert tribunals which must be taken to be familiar with employment practices, as well as the general merits in employment cases.
(3) Mrs Haywood’s contract was made at a time when those employment tribunal cases were thought to represent the general law.
(4) If an employer does consider that this implied term would cause problems, it is always open to the employer to make express provision in the contract, both as to the methods of giving notice and as to the time at which such notices are deemed to be received.
The moral of the story
In this case the contract did not specify the method of giving notice or the time at which such notices were to be deemed to be received. But it is clear that the terms of an employment contract may do so. Many contracts will already contain such a provision but, if not, employers should consider including such a provision.
Note: This material is for information purposes only and does not constitute any form of advice or recommendation by us. You should not rely upon it in making any decisions or taking or refraining from taking any action. If you would like us to advise you on any of the matters covered in this material, please contact Hugh Grant: Hugh@mitchells-roberton.co.uk