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The Supreme Court rules as to when a notice of termination of employment is deemed served

In Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood, the Supreme Court held that in the absence of an express contractual provision, a written notice of termination served by an employer does not take effect until the employee has read it or had a reasonable opportunity of doing so.

On 1 April 2011, Ms Haywood was informed by the Trust that she was at risk of redundancy. Her 50^th birthday was approaching on 20 July. Both parties were aware that if her employment terminated on or after her 50th birthday she would be entitled to a more beneficial pension package. If it terminated before that date, her pension would be less beneficial.

At a redundancy consultation meeting on 13 April, Ms Haywood informed the Trust that she had booked annual leave from 19 April until 3 May as she was going abroad on holiday. Her contract of employment provided for a minimum period of notice of termination of 12 weeks, but did not specify how notice should be given or when it would be deemed effective. On 20 April the Trust sent a letter by recorded delivery giving her written notice of termination on the ground of redundancy.

As she was away on holiday, she was unable to take delivery of the letter and a recorded delivery slip was left at her home on 21 April. A family member collected the letter from the local sorting office on 26 April and left it at her home awaiting her return from holiday. Ms Heywood returned from holiday and read the letter on 27 April.

Following a dispute with the Trust, Ms Haywood brought a claim arguing that the 12-week notice period did not begin until 27 April when she received and read the letter. If the notice was deemed effective on that date the notice period would expire on 20 July, her 50^th birthday, entitling her to the preferential pension.

The High Court upheld the claim as the termination clause in the employment contract could be construed as requiring notice of termination to have been personally received and read by the employee before the period of notice could start to run.

The Trust appealed to the Court of Appeal. The Court of Appeal dismissed the appeal finding that in the absence of any specific contractual provision, contractual notice takes effect only when the employee personally takes delivery of the letter containing the notice (in this instance, on 27 April).

The Trust then appealed to the Supreme Court, arguing that there was precedent from landlord and tenant case-law stating that notice is given when the letter is delivered to the address specified on the notice. The Supreme Court dismissed the Trust's appeal by a majority of 3:2. Finding for Ms Haywood, Lady Hale observed that since there was no express contractual provision the Court had to determine the implied contractual term as to when notice would be deemed to be effective. Precedent created by employment specific case-law held that written notice does not take effect until the employee has read it, or had a reasonable opportunity of doing so. The case-law demonstrated that this approach was consistently applied by the EAT. The Supreme Court in Geys v Société Générale, London Branch (Brief 967), stressed it was important for both the employer and the employee to know whether or not the employee still has a job. In this instance, Ms Haywood would not have been aware of the fact of her termination until she returned from holiday.

The decision of the Supreme Court creates a potential lack of clarity for employers seeking certainty as to date of service notices on employees. What is clear, is that the date of service will vary depending on the individual circumstances of each case. Jonathan Holden, Head of Employment and HR at Forbes Solicitors advises that "it should be best practice for employers considering service of any form of notice to be aware of any annual leave employees may have planned, particularly when time is of the essence. Additionally, it is essential that employee contact records are kept up to date to ensure that notices are sent to the correct address. Employers should also consider including express contractual provisions regarding the service of notices (both in relation to dates of deemed service and alternative modes of delivery), although any terms that are particularly onerous on the employee may be subsequently deemed unfair. Any employer seeking to update the notice provisions of employment contracts, or having concerns about the service of a notice, should seek legal advice from a solicitor with specialist knowledge of employment law."

For more information in relation to service provisions or employment rights in general, please view our Employment and HR section. You can also contact our Employment and HR Team by telephone on 0333 207 1135. Alternatively, send your enquiry to us through our online contact form.

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