3rd May 2018
Imagine the scenario where you have followed what you deem to be a fair and reasonable dismissal procedure, and all that is left to do is to inform the employee of the decision to dismiss and advise them of the date of their dismissal, being in this case when their contractual notice period will expire. In the absence of any contractual provisions dealing with the issue of when notice takes effect, do you think it is enough to send the dismissal letter by recorded delivery and take the date the letter was delivered to the employee’s address as the date the employee was advised of the dismissal? Well, no it is not according to the Supreme Court in the case of Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood.
In this case, Ms Haywood’s position at the Trust was made redundant in the months approaching her 50th birthday on 20 July 2011. Crucially, the Trust needed her 12-week notice period to begin no later than 26 April 2011, to avoid liability for significant enhanced pension entitlements that would kick in should she turn 50 whilst still employed by the Trust. Ms Haywood was informed that her role was at risk on 13 April, and requested that a final decision about this should not be made until she returned from her pre-approved holiday commencing on 19 April until around 26 April. The Trust decided to send the dismissal letter by recorded delivery on 20 April when they knew Ms Haywood was away, and her father-in-law collected it from the sorting office on her behalf on 26 April. She then read it on her return from holiday on 27 April.
The Trust argued that notice of termination was given to Ms Haywood on 20 April, and therefore her 12-week notice period began on that date and expired in advance of her 50th birthday. Ms Haywood said termination was not communicated to her until 27 April when she returned from holiday and read the letter, and therefore her notice expired on 20 July, coinciding with her 50th birthday (and the accompanying entitlement to enhanced pension benefits). The High Court, Court of Appeal and Supreme Court all agreed with Ms Haywood on the basis that, where there is no contractual provision governing when notice takes effect, it can only start to run when the letter by which it is communicated comes to the attention of the employee and they have either read it or have been given a reasonable opportunity to do so.
This case highlights the importance of having provisions governing when notice to terminate takes effect in the employment contract, and employers should review and update their contracts if necessary. Moreover, if there is a reason why notice must be given by a particular date, the safest bet would be to communicate the dismissal to the employee in person before confirming it in writing, so there can be no arguments around the date the notice was given. The same principle applies where you wish to terminate employment with immediate effect (whether or not you are paying in lieu of notice).
The contents of this update are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this update. © Mundays LLP 2018.
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