Notice: When Does it Take Effect From?

It sounds a simple question but following a long-awaited landmark decision in the appeal of “Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood” notice of termination takes effect neither when the termination letter is posted by the employer, nor when it is put through the employee’s front door – but when the employee actually reads it.

The case was brought by Haywood, who was dismissed by reason of redundancy. Under her employment contract she was entitled to a minimum 12-week notice period, but it did not specify how that notice should be communicated.

On 13 April 2011, Haywood was informed that her role was at risk of redundancy following the merger of two NHS bodies. She accepted this but requested that a final decision should not be made in her absence and she would be on holiday and out of the country from 19 – 26 April. On 20 April 2011, the trust sent a letter giving written notice of termination and the impact of this was that if her employment was to terminate before her 50th birthday, which based on the date of the letter it would do, she would receive a reduced pension. The date on which the 12-week notice period started to run was highly material. If it commenced on 27 April 2011, when Hayward read the letter, it expired on 20 July 2011, the date of Mrs Haywood’s 50th birthday and Mrs Haywood would be entitled to claim a non-actuarially reduced early retirement pension.

This is an important ruling as it can be decisive in determining an employee’s entitlement to a bonus or other contractual payment, insurance or employee benefits, or the statutory right to claim unfair dismissal and/or redundancy pay, and increased pension rights.

This only emphasises the importance of ensuring explicit and careful drafting of clauses relating to termination to avoid any ambiguity or misconceptions.

If you require a review of your employment contracts or have more employment law questions then get in contact with us here at HR4B.