Dismissal by post: When does the notice period start to run?

The law implies a number of terms into contracts of employment to provide protection for both employers and employees. Some common implied terms are set out below:

Employers’ dutiesEmployees’ duties
Duty to indemnify employeesDuty to give personal service
Duty to take reasonable care of the employee’s safety and working conditionsDuty to obey reasonable orders
Duty of mutual trust and confidenceDuty of reasonable care and indemnity
Duty to take reasonable care in giving referencesDuty of fidelity and good faith
Duty to notify on termination without noticeDuty not to make a secret profit
Duty to give reasonable noticeNot to conflict any personal interest with their duty of fidelity
Duty to comply with the employee’s statutory rightsDuty of mutual trust and confidence

The recent Supreme Court case, Newcastle upon Tyne Hospital NHS Foundation Trust v Haywood, concerned the date at which notice of termination by post was deemed to be effective in the absence of an express term.

Facts: Mrs Haywood had been an NHS employee for over 30 years and in early 2011 she was notified that she may be made redundant. Mrs Haywood’s contractual notice period was 12 weeks and her 50thbirthday was fast approaching. If Mrs Haywood’s employment was terminated following her 50thbirthday she would been entitled to a significantly larger retirement pension than she would be if her employment terminated before that date.

It was calculated that if notice of termination was provided to Mrs Haywood on or after the 27 April 2011; her notice would expire on or after her 50thbirthday. The Trust sent a letter of termination on 20 April to both Mrs Haywood’s husband’s email address and by recorded delivery to her home.

Mrs Haywood was away on holiday from 18 April until 27 April and so was absent when the letter delivery was attempted. The letter was subsequently sent to the Post Office for collection. Mrs Haywood’s father-in-law collected the letter on 26 April and Mrs Haywood read it upon her return on 27 April.

The Trust argued that the notice commenced on the date the letter was delivered (26 April), however, Mrs Haywood claimed that it ran from the date the notice was read (27 April).

Both the High Court and Court of Appeal ruled in favour of Mrs Haywood and so the Trust appealed to the Supreme Court.

Legal issue: On which date did Mrs Haywood’s notice period start to run?

Finding: The Supreme Court held that the notice period starts to run from the date the employee receives the letter of dismissal and either reads it or has had reasonable opportunity to do so. In this case, therefore Mrs Haywood’s notice ran from 27 April.

Implication: Although some contracts of employment set out how notice of termination will be provided and when it will be deemed received, many do not. They should!

In the absence of an express term the above outlined implied term will take effect. What is considered ‘reasonable’ will turn on the facts of each case.

If an employer considers that the implied term will cause issues, it should make express provisions in the contract, both as to the methods of giving notice and as to the time at which such notices are deemed to have been received.

Additionally, if employers are keen to dismiss an individual prior to a certain date for contractual purposes, they should consider carrying out the dismissal in person (followed by a written confirmation) to ensure that notice starts to run from that date.