Getting it wrong when giving notice of termination can be an expensive business, in particular where entitlement to bonuses or enhanced pension schemes are dependent upon an employee still being in employment on a particular date. In some cases the contract will specify not only the period of notice but also when it is deemed to take effect.
In Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood the Supreme Court considered, in the absence of an express contractual term, when the notice period begins to run when written notice is given by post.
The possibilities were:-
(i) when the letter would have been delivered in the ordinary course of post;
(ii) when it was in fact delivered; or
(iii) when the letter comes to the attention of the employee and he or she has either read it or had a reasonable opportunity to do so.
Mrs Haywood had been notified that her role was at risk of redundancy in April 2011 and attended a consultation meeting with her employer on 13 April at which she indicated that she had two weeks annual leave booked beginning on 18 April. Mrs Haywood was due to turn 50 on 20 July 2011 and as long as her employment terminated after that date she would be entitled to a non-actuarially reduced early retirement pension. If her employment terminated prior to that date she would lose that entitlement. Mrs Haywood asked that no decision be made while she was on annual leave. However, on 20 April, written notice of dismissal was issued which purported to terminate the employment on 15 July. The letter (wrongly dated 21 April) was sent by email to Mrs Haywood's husband, by recorded delivery and by ordinary first class post.
Mrs Haywood was entitled to 12 weeks' notice so the crucial date was 27 April - notice given on or after that date would expire on or after her 50th birthday entitling her to the early retirement pension without reduction. Coincidentally, Mrs Haywood returned home from holiday on 27 April at which point she opened and read the letter. Her husband also opened his email on that date.
Mrs Haywood raised High Court proceedings claiming that the 12 week notice period did not start until she read the letter on 27 April and she therefore was entitled to the pension. The High Court found that it was necessary to imply a term that Mrs Haywood had a right to actually be informed, either in writing or orally, of her dismissal - she therefore had to have a reasonable opportunity to look at the letter. This meant that she was still employed by the Trust on 20 July and her claim was successful. The Trust's appeal to the Court of Appeal was dismissed with the majority finding that "the contents of the letter had to be communicated to the employee".
When the Trust appealed to the Supreme Court on the basis that notice is given when a letter is delivered (whether someone is there to read it or not) Mrs Haywood relied on a line of EAT cases dating back to 1980 which held that written notice does not take effect until the employee has read it or had a reasonable opportunity of doing so. The Supreme Court found in favour of Mrs Haywood. The EAT was an expert tribunal which must be taken to be familiar with employment practices and they had taken a consistent approach to this issue since the 1980's and that approach, as relied upon by Mrs Haywood, was correct.
This decision, while entirely fair in ensuring that an employee is actually aware that the notice period is starting to run, should encourage employers to inform employees in person (or at least by telephone) that their employment is being terminated - something that would be considered best practice by most anyway - with written confirmation simply recording what has already been discussed. This is particularly important when employers are trying to avoid employees being employed on a particular date, as in the case of Mrs Haywood.
