Employment contracts: When does notice of termination start to run?

The Supreme Court has recently handed down its decision in Newcastle Upon Tyne Hospitals NHS Foundation Trust v Haywood 2018 UKSC 22. With two judges dissenting it is worth highlighting their decision.

The central question was when the employee’s notice period started to run following notice of termination being sent by post; the date when notice was delivered to her or the date when she had either read it or had a reasonable chance to read it?

H’s position was redundant. On 20 April 2011 the Trust sent a letter to her home address by recorded delivery. The letter gave notice terminating H’s contract on 12 weeks’ notice. According to the letter, this expired on 15 July 2011. H was away on holiday when the Post Office tried to deliver it. It was taken to the sorting office and collected by H’s father-in-law who took it to her home on 26 April. H read the letter on 27 April.

If notice of termination had been validly served by 26 April, the 12 week notice period would have expired before H’s 50^th birthday on 20 July 2011. In that event, her pension would be lower.

H argued for 27 April, which is when she first had a chance to read the letter. This, she said, was in line with EAT practice since 1980 to the effect that, unless there was an express contractual term to the contrary, there was an implied term that notice took effect only when an employee had either read or had a reasonable opportunity to read it.

The Trust argued in favour of the date of delivery on 26 April in line with the common law rule that notice was valid when it was actually delivered, in line principally with notices to quit in property cases.

The Court of Appeal held that notice started to run on 27 April as the letter had actually to be received by H before time began to run.

The Supreme Court has affirmed the Court of Appeal ruling. It found that the law in non-employment cases was not as clear cut as the Trust had contended. The notice certainly had to be received but the presumption of receipt at the intended address was rebuttable. It was also the case that the notice must have been communicated or come to the mind of the addressee but there were exceptions to that as well. EAT practice was to be preferred in employment cases.

Two Justices dissented. Lord Briggs felt that contracts of employment were no more than a sub species of relationship contracts which could be terminated on notice, including property and business contracts. The consistent rule has been that that written notice of termination was properly given when the document containing it was delivered by hand or post at the recipient’s address.