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When Does Notice of Termination Take Effect?

Exactly when notice of termination takes effect can impact on an employee's entitlement to certain benefits or employment rights. In a recent case, the Court of Appeal ruled that, in the absence of an express term in the employee's contract, notice of termination takes effect when the employee actually receives it in person (Newcastle upon Tyne NHS Foundation Trust v Haywood).

Sandi Haywood had worked for the NHS for more than 30 years. She held a senior role as associate director of business development for Newcastle and North Tyneside Primary Care Trusts. In April 2011, following a merger of the two bodies, she was informed that she was at risk of redundancy. On 13 April, at a meeting to discuss her situation, it was accepted that she was entitled to 12 weeks' notice and she was told that no final decision on redundancy had yet been taken. She said that she would be entitled to an NHS pension of about £200,000 if she were made redundant after her 50th birthday on 20 July 2011 and reminded her employer that she was about to go on annual leave, including a trip to Egypt.

On 20 April 2011, while Ms Haywood was away on holiday, her employer sent three communications, all terminating her contract with 12 weeks' notice, thus purporting to end her employment five days before her 50th birthday. One was a letter sent by recorded delivery, another was sent by normal post and a third copy was sent to the email address of Ms Haywood's husband. Her father-in-law collected the letter sent by recorded delivery and left it at her home on 26 April. She subsequently opened it at 8:30am on 27 April. Her husband did not read the letter emailed to him until later the same morning.

The question was whether the employer posting the letter terminating Ms Haywood's employment contract was enough by itself to trigger the notice period, whether it had to have arrived at her home or whether, as she argued, the effective date of termination was 12 weeks after she had actually read the communication. If the date was on or before 26 April, her pension entitlement would be significantly reduced.

The High Court ruled in favour of Ms Haywood and the Trust appealed.

In a majority ruling, the Court of Appeal found that in the absence of an express provision stating when a notice of termination is effective, notice is served when it is actually read by the recipient. The Court was confident that Ms Haywood had not unreasonably avoided receipt of the communication and the Trust had been aware that she was absent from home. On that basis, her notice period expired after her 50th birthday and she was thus entitled to an enhanced pension payment.

The Court added that the notice sent by email to Ms Haywood's husband's account was not, in any case, effective as she had provided a postal address and, although she had used that email address herself on a past occasion, she had not given permission for it to be used for delivery of her notice of termination.

For the avoidance of any doubt, employers are advised to ensure that written notice is given to an employee in person and the nature of the communication is confirmed.

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