Holiday at the right time?

In the recent case of Newcastle upon Tyne Hospital NHS Foundation Trust v Haywood the employee, Mrs Haywood was on holiday overseas when her employer, the Trust, issued the Notice of termination of her employment. The Notice was issued on 20 April and Mrs Haywood was out of the country on holiday from 18 April to 27 April which resulted in her not having the opportunity to open and read the termination letter until 27 April when she returned.

When the letter was deemed to be served was key in this case as it determined Mrs Haywood's level of pension entitlement. If her employment terminated before her 50th birthday she was not to be entitled to receive an early retirement pension worth a staggering £400,000. The key date was therefore 27 April as this was the date Mrs Haywood turned 50. If the termination was deemed to be given on or after this date, it would have expired on or after her 50th Birthday and Mrs Haywood would have been entitled to the early retirement pension sum.

The Trust argued that the notice was effective from the day it was deemed to have been delivered to the Mrs Haywood. In this case, this was the day on which Mrs Haywood's father had collected the letter from the post office on 26 April. Mrs Haywood argued the notice was only effective from the day she actually read the letter which was not until on 27 April. The Court of Appeal and the Supreme Court both agreed with Mrs Haywood.

What are the implications for employers?

The employers' relationship with their employees is mainly governed and determined by the contracts of employment which are agreed between the parties. If the employment contract does not expressly state when and how a notice is deemed effective, the implied terms would determine its destiny. In the case of Mrs Haywood, if the Trust had included express provisions in her employment contract, stating notice was effective 48 hours after recorded delivery, it would have been able to lawfully terminate her contract before her 50th Birthday and to avoid her entitlement to be in receipt of an early pension.

In ensuring the effective receipt of the relevant notice, it is worth taking all reasonable measures to ensure the decision is effectively communicated to the employee. This could include a follow up telephone call to confirm safe receipt of the relevant letter.

If you need help with any aspects of managing your employees, from appointment to dismissal, please contact our specialist employment team, lead by Ed Jenneson.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.