On Wednesday the Supreme Court handed down its judgment in the case of Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood.
The question they had to answer was: when did notice of termination of Mrs Haywood’s employment take effect? Was it when the letter was delivered (as the NHS Trust argued) or was it when Mrs Haywood actually read it or at least had a reasonable opportunity to read it (as she argued). That may sound straightforward, however, in total, 9 senior judges have now considered the question and they are split 6:3.
In the early part of 2011 Mrs Harwood was going through a redundancy consultation. She therefore attended a consultation meeting on 13 April 2011. During the meeting she told her employer that she had booked two weeks’ annual leave, beginning on 18 April 2011, and that she would return to work on 3 May 2011. She explained that she was going to Egypt during that time and asked her employer to postpone any decision until she got back, but that was not agreed.
No doubt the reluctance to postpone the decision was because the Trust knew that unless Mrs Haywood’s employment was terminated before her 50th birthday she would be entitled to claim an early retirement pension.
Because Mrs Haywood was entitled to 12 weeks’ notice what the Supreme Court called the ‘crucial date’ was 27 April 2011. If she was given notice on or after this date she would become entitled to the pension; if notice was given before this date she would not be.
In fact the Trust sent a letter by recorded delivery on 20 April giving notice to terminate her employment. By this time she was already on holiday in Egypt.
Because she was not there to sign for the letter it w it might also effect an employee’s entitlement to bonus or benefitsas returned to the sorting office. However Mrs Haywood’s father (who was keeping an eye on the house) found the delivery slip and went to collect the letter on 26 April 2011, leaving at the house for Mrs Haywood to read on her return. She returned from her holiday in the early hours of 27 April 2011 and eventually read the letter later that morning.
Ultimately the Supreme Court held that Mrs Haywood was correct. Notice was not given until she read the letter on 27 April 2011 and therefore she was entitled to the pension.
In truth the decision should not come as too much of a surprise to employment lawyers as, in reaching that decision, the Supreme Court was endorsing the approach already adopted in the employment tribunals. However, now the question has been settled, it is a good time for employers to reflect on the issues which can arise.
Knowing when employment has come to an end is important for a number of reasons. Most obviously an employer will want to know when they have to stop paying the employee. However, or their entitlement to statutory payments like maternity or redundancy pay. It may even be crucial in determining whether an employee has the right to make legal claims, e.g. unfair dismissal.
While employers may be concerned that this decision creates uncertainty about when notice has taken effect, there are certain practical steps they can take.
One simple precaution would be to deliver a notice letter by hand so that there can be no dispute about when the employee had the opportunity to read it. Of course that may not always be practical, so employers may also want to think about drafting their contracts of employment to expressly state when notice is deemed to take effect (e.g. two days after the posting of a letter). It is important to note that the issues in Mrs Haywood’s case only arose because the contract of employment did not say anything at all about when notice would be effective, so it was left to the court to determine what the contract meant.
If you have any queries about giving notice, contracts of employment or any other employment issue, please contact us to speak to one of our solicitors.
James Baird, Senior Solicitor, Leyton UK