New case could affect Notice Periods

You may well have seen in the news recently the reports of an Appeal Case regarding when a Notice Period starts in relation to the termination of employment.

What was the case about?

The case concerned Mrs Haywood, who was made redundant by Newcastle-Upon-Tyne Hospitals NHS Trust in 2011.

Having been informed that she was at risk of redundancy, Mrs Haywood had advised the NHS Trust that she would be on holiday from 19th April 2011 until 3rd May 2011.

The NHS Trust then sent three letters to Mrs Haywood on 20th April confirming that she was being made redundant with 12 weeks’ notice, which the NHS Trust advised would expire on 15th July 2011.

One letter was sent to Mrs Yahwood by recorded delivery and an advisory card was posted through her letterbox on 21st April. Mrs Haywood’s father-in-law collected the letter from the sorting office on 26th April and left it at her home on the same day.

Mrs Haywood returned from holiday in the early hours of 27th April and went straight to bed. She read the letter later that morning.

The other two letters were sent to Mrs Haywood by standard post and to her husband’s email address, which Mr Haywood read mid-morning on 27th April.

The important question raised by Mrs Haywood was, when was her letter of notice of termination deemed to have been received?

If Mrs Haywood’s notice period expired AFTER her 50th birthday, then she would be entitled to receive a higher pension but she would need to have been given her letter of notice of termination after 26th April 2011.

There was no clause in Mrs Haywood’s contract which expressly stated when notice applies and so the High Court found that the notice of termination was only effective once Mrs Haywood had actually read the letter of notice, which was on 27th April 2011.

Newcastle-Upon-Tyne Hospitals NHS Foundation Trust appealed this ruling which was subsequently dismissed by the Court of Appeal, which held that, because there was no express clause in Mrs Haywood’s employment contract which specified when a notice of termination is effective, the notice of termination only takes effect from the date it is received by the employee, giving them chance to personally take delivery of the letter containing the notice.

In this case, Mrs Haywood opened and read the notice on 27th April, meaning that her notice period expired on her 50th birthday and that she was therefore entitled to receive a higher pension.

What does this mean for Employers?

This ruling could have a major impact on employers, because the Court’s decision implies a term into all contracts of employment that notice to terminate the contract of employment will only take effect from the date on which the employee has read the letter giving notice (or has had reasonable opportunity to do so).

In order to reduce or remove the effect of this ruling, employers should,

  • where practical, give notice of termination to the employee in person and follow this up in writing.
  • If this is not possible to do, then the employer should send written notice of termination by recorded delivery, which will assist in proving that notice has indeed been sent to the employee.
  • The employee would then need to provide evidence as to why they did not have reasonable opportunity to read the letter.

However, the best way to mitigate the effect of this ruling is to include an express clause in your employment contracts to make in clear of when notice is deemed to take effect.

If you would like any more information on this matter, or for more information on what clause to put into your employment contracts, email us at info@orchardemploymentlaw.co.uk

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