When are dismissal notices effective?

In the absence of an express contractual term dealing with the situation, notice of termination is only effective when it comes to the employee’s attention and they have had a reasonable opportunity to read it.  

Facts

In Newcastle upon Tyne NHS Foundation Trust v Haywood, the Trust sent a letter to Ms Haywood terminating her employment by reason of redundancy with 12 weeks' notice on 20 April 2011. Ms Haywood was out of the country on holiday. The Trust sent the letter by recorded delivery. Ms Haywood’s father-in-law collected the letter from the Post Office on 26 April and left it at her home the same day. Ms Haywood arrived back from holiday in the early hours of 27 April and did not read the letter until about 8.30am on 27 April.

The Court had to decide whether the notice of termination expired before Ms Haywood’s 50th birthday on 20 July 2011, as she was entitled to an enhanced early retirement pension if she was still employed on her 50th birthday.  The Trust had to have given notice of termination by 26 April for the lower pension to be payable.

The case reached the Supreme Court. The Trust argued that notice was given (and therefore notice only started to run) when the letter was delivered (i.e. when it would have arrived in the ordinary course of post).  Ms Haywood argued that notice was not given until the letter came to her attention and she had had a reasonable opportunity to read it.  On that basis, notice only started to run on 27 April and expired on 20 July, her 50th birthday.

Decision

The Supreme Court, by a majority, agreed with Ms Haywood.   In the absence of an express contractual term dealing with the situation, notice of termination is only effective when it comes to the employee’s attention and they have had a reasonable opportunity to read it.  

As a result, Ms Haywood had still been employed on her 50th birthday and was entitled to an enhanced early retirement pension.  

Implications

Where an employer needs to ensure that employment will terminate by a particular date, it is best to hand the letter containing the notice of termination to the employee personally.  

It is always open to an employer to specify in the employment contract how notice must be given and when it takes effect.  Employers may therefore wish to include such a provision in their contracts.  However, that will only work from a contractual viewpoint.  It will not assist in cases where an employment tribunal is considering the effective date of termination of an employee’s employment (EDT), in order to work out if they have the two years’ service needed to bring an unfair dismissal claim.  In such cases, there is clear case law which decides that termination is only effective once the employee has read the letter (unless they have deliberately avoided doing so), regardless of what the contract says.