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When do termination notices take effect?

When does a notice to terminate an employee’s employment take effect: when the termination letter is posted by the employer, when it is put through the employee's front door or when the employee actually reads it? 

In Newcastle upon Tyne NHS Foundation v Haywood, Mrs Haywood's employment was terminated by her employer because of redundancy. Her employment contract detailed that she was entitled to a 12-week notice period but was silent about how that notice should be communicated. The reason this mattered so much was because if her employment ended before her 50th birthday, she would not get paid as much by way of her pension. 

Her employer confirmed that it had given notice to Mrs Haywood by a letter dated 21 April (which was actually misdated, because it was sent on 20 April) and it was sent to her home both by recorded delivery and in the ordinary post. A copy was also emailed to her husband's email address.

The letter sent by recorded delivery could not be delivered on 21 April because no one was at home. Mrs Haywood was on holiday with her husband and they did not return until 26 April. Her father was looking after the house while they were away and he collected the letter from the sorting office on 26 April, in readiness for her return. However, it was not until the morning after, on 27 April, that Mrs Haywood dealt with her post and opened the letter. Her husband also read the email later in the day on 27 April. (It is not clear whether the letter sent by ordinary post was ever received.)

The employer argued that notice was effectively communicated on 20 April (the date the letters and email were sent), meaning her 12-week notice period expired before her 50th birthday, which was on 20 July.

Mrs Haywood's position was that notice of her termination was not effectively communicated until she read the letter on 27 April, meaning her termination date would be after her 50th birthday. (For her employment to expire before this birthday, the notice would have to be communicated on 26 April at the latest.)

The Court of Appeal agreed with Mrs Haywood. She had not deliberately left her house or purposefully avoided opening the communications to her. Her employer had known that she was going on holiday. The court was clear that the effective date is when the employee reads the letter giving notice and, in Mrs Haywood's case, that was on 27 April. It stated: “The letter of dismissal had to be actually communicated to the employee before it took effect. Accordingly, the respondent [Mrs Haywood] was entitled to receive her pension at the higher rate as there was no communication before 27 April and thus notice did not expire before her 50th birthday.”

When an employer decides to terminate an employee’s employment, there can sometimes be practical difficulties in ensuring the employee has received and read the notice that terminates their employment, such as if the employee is absent from work because of holiday or sickness. However, when it is important that an employee's employment terminates before a certain date, employers must take steps to properly serve the notice to that individual and ensure it is actually read by them.

Katee Dias is a senior solicitor in the employment team at Goodman Derrick

Added: 23-05-2017

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