97: Supreme Court rules that notice of termination of employment will only start to run once read by employee

In Newcastle upon Tyne Hospitals NHS Foundations Trust v Haywood, the Supreme Court has ruled that, in the absence of an express contractual term, written notice of termination of employment sent by post only starts to run once the letter comes to the attention of the employee and they have either read it or had a reasonable opportunity of doing so. This issue was significant for the employee in this case because it determined whether she received an enhanced early retirement pension.

Mrs Haywood was entitled to 12 weeks’ notice of termination under her contract of employment.  Her position became redundant near her fiftieth birthday on 20 July 2011. If her employment was terminated on or after this date, she would be entitled to a non-actuarially reduced early retirement pension.  On 20 April 2011, the Trust issued written notice of termination of Mrs Haywood’s employment on grounds of redundancy, ending on 15 July 2011. The letter was sent to her home address by recorded delivery. However, Mrs Haywood did not read it until her return from holiday on 27 April. The Trust argued that her notice period began when the letter was delivered to her address, meaning that her notice period would expire before her fiftieth birthday. Mrs Haywood argued that her notice period did not begin to run until she read the letter on 27 April.

Both the High Court and now the Supreme Court found in favour of Mrs Haywood. The Supreme Court rejected the Trust’s alternative arguments that there was a common law rule that notice was given when a letter was delivered to the relevant address, or when it would have been delivered in the ordinary course of post. It ruled that when written notice is sent by post, notice starts to run when the letter comes to the attention of the employee and they have either read it or had a reasonable opportunity of doing so. Employers also have the option of including express contractual provisions on the required methods of giving notice and when it is deemed to have been received.

Although the date of dismissal for contractual purposes is a separate concept from the effective date of termination for statutory purposes, this decision confirms that both will take effect when the employee actually reads the relevant letter. However, in order to avoid any uncertainty, particularly where pension, bonus or other benefits may depend on critical dates, employers are advised to review their contracts of employment to ensure that they include provisions setting out when notice is deemed to have been received and take effect.