Employers should take note of a recent Court of Appeal decision which ruled that the date notice of termination takes effect is the date the notice is personally received by the employee.
This ruling reminds employers to ensure that their contracts are drafted to stipulate when notice is deemed served on an employee, and the means by which notice may be served. Care should also be taken when communicating notice of termination.
In the case of Newcastle Upon Tyne NHS Foundation Trust v Haywood, Mrs Haywood was informed that she was at risk of redundancy. During consultation she informed her employer that she was on leave in Egypt from 19 April 2011 and would not return home until the 27 April.
On 20 April, the day after she flew, the Trust sent three letters confirming the redundancy and purporting to terminate her employment with 12 weeks’ notice, thereby ending Mrs Haywood’s employment on 15 July.
Unfortunately for the Trust, the employee did not personally receive and read the letter of termination until 27 April, when she returned from holiday. This is despite the fact that the letter was sent by special delivery, first class post and electronically to her husband’s email address.
Crucially in this case, Mrs Haywood turned 50 on 0n 20 July 2011 and, if her employment was deemed to terminate on or after that date, she would become entitled to an enhanced pension.
Court of Appeal
The Court upheld the High Court’s decision that notice was only given once Mrs Haywood had actually read the recorded delivery letter on 27 April. This meant her effective date of termination was 20 July 2011, her 50th birthday. As a result, she was entitled to the enhanced pension at a cost to the Trust of some £400,000.
In reaching this decision the Court came to the following conclusions:
- The notice sent by email was not effective. It was sent to Mrs Haywood’s husband rather than her, and she had not given permission to send communications to this email address.
- The contract dealt only with the length of the notice period and not the effective date of notice. As there was no express term in the contract about when notice was effective, common law authorities on this point stood.
- Under common law principles, where notice is served by post it must be received by the employee in order to be effective.
There are some useful takeaways for employers as a result of this ruling. Firstly, employers who wish to use email as a means of serving notice on employees should include a clause to this effect in the contract of employment. The contract should also stipulate when notice of termination is deemed to be served on the employee.
Secondly when giving an employee notice of termination great care should be taken to ensure notice is served in time, taking into account any milestones and allowing a ‘grace period’ for unforeseen circumstances which may delay receipt of the notice.
Finally where an employer wants certainty that notice has been properly served and that it has actually been received by a recipient (as opposed to delivered to their home), it should give that notice personally.
If you need help drafting appropriate contractual terms or want us to provide advice on your existing contract templates, please contact the Devonshires Employment Team.