Does contractual notice of termination take effect on posting, delivery, or communication of the notice if there is no express term specifying when notice will be effective?

The Facts

Mrs Haywood's employer, Newcastle Primary Care NHS Trust, decided to make her redundant. She had told the Trust that she would be on annual leave from 19 April until 3 May 2011.

On 20 April 2011, the Trust sent three letters confirming redundancy and purporting to terminate Mrs Haywood's employment with 12 weeks' notice, on 15 July 2011:

  • One letter, incorrectly dated 21 April, was sent by recorded delivery and a slip was left at her house on 21 April. Her father-in-law collected the recorded delivery letter from the sorting office on 26 April and left it at her home on the same day. Mrs Haywood returned from Egypt in the early hours of 27 April, went to bed and subsequently read this letter at about 8.30am on 27 April.

  • One letter was sent by standard mail. No findings of fact were made as to when this was received.

  • One letter was sent by email to Mrs Haywood's husband's email address. Mrs Haywood's husband read the email at 10.14am on 27 April.

Mrs Haywood's contract of employment did not stipulate when notice given under the contract would be deemed to be received.

The question of when the notice was deemed to be received was of vital importance for Mrs Haywood (and for the Trust). If her notice period expired after her 50th birthday, she would be entitled to a higher pension. For this to happen, notice of termination had to be given after 26 April 2011.

The High Court found that, in the absence of an express term, the notice was only effective once Mrs Haywood had actually read a letter of dismissal, so that the contents were communicated to her. This was on 27 April 2011, upon her return from holiday. This finding was based on the High Court's construction of the wording of her contract which set out the length of the notice period.

The Trust appealed, and the Court of Appeal (with one judge dissenting) dismissed the appeal.

The Court of Appeal held that, in the absence of an express contractual term specifying when a notice of termination is effective, the notice takes effect from the date it is received by the employee in the sense of them having personally taken delivery of the letter containing it. In this case this was the day Mrs Haywood opened and read the notice (27 April) meaning she was entitled to the higher pension.

What does this mean for employers?

This decision muddies the waters, but employers should:

  • When next reviewing contracts of employment, ensure that they contain clear provisions setting out how notice should be given, and when it is deemed to have been received.

  • Make sure that notice is given according to any contractual terms.

  • If there are no contractual terms, where possible, give notice in person, to avoid confusion.

  • If the date on which employment terminates is critical and notice cannot be given in person, send the letter by courier.

  • Where possible, during disciplinary/consultation meetings, ascertain if the employee is going to be on holiday at key times, and factor this into timetabling.

  • If giving notice by email, set the email with a delivery and read receipt notifications. Ask the employee to acknowledge receipt.

  • When posting notice, send it by registered mail.

Employers should note that the principles discussed in this case were about the effect of notice on contractual terms. They do not apply when looking at termination dates for statutory claims – e.g. for working out whether an employee has been employed for long enough to bring an unfair dismissal claim, or for statutory redundancy purposes. The provisions around contractual notice are most likely to be relevant in relation to the provision of benefits (e.g. pension entitlement) and bonus entitlement.

Newcastle upon Tyne NHS Foundation Trust v Haywood