Employment Law Update – When does notice of termination take effect?
25 April 2017
The Court of Appeal has recently decided that notice of termination takes effect when the employee has personally taken delivery of the letter containing the notice.
Newcastle upon Tyne NHS Foundation Trust v Haywood
Facts
Ms Haywood was notified that her position of associate director of business development was at risk of redundancy following a merger of NHS bodies. Following a consultation meeting, she took a period of pre-arranged annual leave during which she spent time out of the country. She returned home on 27 April 2011.
In her absence, on 20 April 2011, Ms Haywood was sent letters (by recorded and standard delivery as well as by email) purporting to terminate her employment with 12 weeks’ notice, to expire on 15 July 2011.
Ms Haywood turned 50 on 20 July 2011, and if notice of termination expired prior to that date she was entitled to receive a lower pension than if her employment terminated after that date. Notice would have needed to be given by 26 April 2011 in order for the lower pension to be payable.
Court of Appeal decision
The Court agreed (by a majority) with the conclusion of the High Court, holding 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. This requires the employee to have personally taken delivery of the letter, even if it has not been read. Since Ms Haywood only took delivery of the letter on 27 April 2011, notice expired on her 50th birthday meaning that she was entitled to the higher pension.
Consequences
This decision was made on the basis of the individual’s contractual rights (affecting her right to receive a pension) rather than the effective date of termination for statutory purposes.
In such circumstances, where an individual’s date of termination is significant whether for contractual or statutory reasons, it would be a good idea to deliver notice personally to ensure it has been received. However, this might present practical difficulties if, as in this case, the individual is out of the country. For this reason, it might be advisable to include an express term in the employment contract to deal with the question of when notice is deemed to take effect.
The content of this article is for general information only. For further information on termination, please contact Liz Stevens or a member of Birketts’ Employment Law Team. Law covered as at April 2017.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at April 2017.