The Supreme Court hands down its long-awaited decision in the appeal of Newcastle upon Tyne Hospitals NHS v Haywood

This complaint was brought by Haywood who was dismissed after being made redundant by her employers, Newcastle upon Tyne Hospitals NHS Foundation Trust. In this case the claimant had worked for the NHS for over 30 years as an associate director of business development.

The provisions of her employment contract ensured that she was entitled to a minimum 12-week notice period but was silent on how the notice should be communicated.

On the 13^th April, Haywood received the news that her role was at risk of redundancy following the merger of the two NHS bodies. She accepted this, however, requested that the final decision should not be made in her absence – informing her employers she was on annual leave from the 19^th April 2011 – these holidays had already been approved by her employers.

On the 20^th April, the Trust sent a letter to Haywood that provided her with a written notice of termination – with the knowledge that she was away on holiday at the time.

However, they mistakenly said that they had given her written notice that was dated the 21^st April, which appeared to be misdated; the letter was sent on the 20^th April to her home address by recorded delivery and by normal post. A copy of this letter was also sent to her husband’s email address.

This meant that should the claimants employment be terminated before her 50^th birthday, she would receive a reduced pension.

Because Haywood had told her employers she would be on holiday and would not be back until 26^th April, there was no one at home when the recorded delivery letter arrived.

It wasn’t until the 26^th April that her father in-law went and collected the letter from the local sorting office. Haywood then returned home from her holiday on the 27^th April, it was this date that the letter was read.

Her employers claimed that the notice was communicated effectively on the 20^th April, which meant her 12-week notice period lapsed before her 50^th birthday, which fell on the 20^th July.

The claimant argued that the notice of termination was not communicated until she actually read the letter on the 27^th April. Thus, her termination date would be after her 50^th birthday.

Both the High Court and the Court of Appeal upheld this case, agreeing that the claimants notice period commenced on the 27^th April, with the Court of Appeal expressing that the effective date is when the individual reads the termination letter.

A statement from the Supreme Court read: “On the unusual facts of this case, the date on which the 12-week notice period started to run was highly material. If it commenced on the 27^th April, it expired on the 20^th July 2011 – the date of Mrs Haywood’s 50^th birthday – and Mrs Haywood would be entitled to claim a non- actuarially reduced early retirement pension.”

Due to the absence of an expressed contractual provision, the courts had to determine the implied contractual term to work out when the notice to effect. Haywood’s employers argued that a common law rule, that originated from landlord and tenant cases, maintained that notice was given when the letter was delivered to the claimant’s address.

Haywood was then dependent on the approach taken by the Employment Appeal Tribunal (EAT) in previous employment cases; that notice takes effect when it has been received and read by the employee. The Supreme Court majority supported this approach and agreed that the EAT was correct.

Employer considerations

The decision made in this case is important for both employers and employees, as the date in which the employment relationship is terminated can play a crucial factor when determining an employee’s entitlement to a bonus or contractual payment, insurance, employee benefits, the right to claim unfair dismissal, redundancy pay and pension rights.

How can Employment Law Services (ELS) help?

For employers that already have contracts of employment in place, we can review all existing documents and update them as required; for employers that have nothing in place, we can produce effective contracts of employment for all employees from scratch.

Therefore, If you require employment law advice on any of the issues raised in this article, or any other employment issue give us a call today on 0370 218 5662.  You can also find out more about our fixed fee HR packages here and fixed fee employment law packages here, or get in touch.