By Ben Smith - 31 May 2018
When will an employee’s employment terminate when they do not receive a termination letter until they return from a holiday? The Supreme Court has examined this issue in the recent case of Newcastle upon Tyne NHS Foundation Trust v Haywood.
Ms Haywood (H) was informed in April 2011 that she was at risk of redundancy. A decision was subsequently taken to terminate her employment. A letter informing her of this decision was sent to her home address by recorded delivery. However, H was on holiday at the time, and her employer had been given notice that H would be on holiday. H’s relative collected the letter from the post office, leaving it at H’s house for her return. When H returned from holiday, she promptly read the letter.
The reason this case was fought all the way up to the Supreme Court is that H would be entitled to a significantly more generous pension if she was dismissed after her 50th birthday. If notice took effect when the letter was sent (or a few days thereafter) termination would have been effective before H’s 50th birthday. If notice took effect when the letter was read, however, termination was effective after her 50th birthday.
The Supreme Court found that in the absence of an express contractual provision governing when noticed of termination is deemed to be effective, notice will only take effect when the individual reads the letter (or when they have had a reasonable opportunity to read it – so an individual in a similar position would be unlikely to be able to rely on having waited a week to deal with a mountain of post-holiday post!). H was therefore entitled to the higher rate of pension.
Best practice therefore is to ensure that your employment contracts have an express term setting out when notice of termination will be deemed to be effective. In addition, you can also minimise your risk by: