Haywood v Newcastle upon Tyne Hospitals NHS Foundation Trust

The Court of Appeal considered when notice of termination under an employment contract takes effect for the purpose of entitlement to an NHS pension enhancement. The majority held that, under the general law applicable to termination by notice, a notice sent by post must in practice be received at the recipient's address before it takes effect; mere posting or delivery into the postal system is not enough where the contract requires notice to be "given". The judge below had found that the dismissal letter was not effectively communicated to the employee until she opened it on 27 April 2011; the Court endorsed that approach and concluded she was entitled to the higher pension rate. The court also rejected the employer's alternative arguments based on waiver, estoppel and an uncontested possible Regulation E3 certification under the NHS pensions rules.

The appellant Trust appealed from an order of HHJ Raeside QC which declared that the respondent was employed up to and including her 50th birthday and ordered the Trust to ensure she received a pension under Regulation E3 of the National Health Service Regulations 1995 and to pay arrears. The appeal raised a narrow factual and legal issue: when did the contractual notice period start to run for termination given that the dismissal letter had been posted while the employee was on holiday and was only opened after her return?

Background and procedural posture:

• The respondent was an associate director employed originally by a Primary Care Trust; her contract transferred to the appellant on 1 April 2011. Her contract provided for 12 weeks' contractual notice. She would obtain a materially enhanced NHS pension if the notice period expired on or after her 50th birthday (20 July 2011).
• The Trust sent dismissal communications on or about 20–21 April 2011 by recorded delivery, ordinary post and by e-mail to the employee's husband. The recorded-delivery packet was collected from the sorting office by the respondent's father-in-law on 26 April and left at the respondent's home; the respondent opened post and read the recorded-delivery letter on 27 April 2011.
• The judge below held that the notice did not take effect until the respondent had read the dismissal letter on 27 April 2011 and ordered the Trust to pay the pension arrears; the Trust appealed.

Issues considered:

1. Whether the contract contained an express term or required an implied term that notice only took effect once the employee had received or read it;
2. Whether posting or delivery into the post (or deemed service) was sufficient;
3. Whether the appellant was precluded from relying on non-communication by waiver, election or estoppel; and
4. Whether the Trust would, or lawfully could, have certified under Regulation E3 of the NHS Pensions Regulations 1995 that the member had unreasonably refused to seek or accept alternative employment.

Court's reasoning in brief:

• The majority concluded the question of when notice took effect in a termination-by-notice case is governed by general contractual principles and the evidential rules about delivery/receipt. A notice sent by post is effectively given when it arrives at the recipient's proper address and is thereby (rebuttably) presumed to have been received; that presumption can be displaced by evidence that the addressee did not in fact receive it. The trial judge had found on the facts that the respondent had not received/read the letter until 27 April 2011 and that she had not unreasonably avoided receipt. On that factual basis she was entitled to the enhanced pension.
• The court rejected the Trust's arguments that posting alone, that an e-mail to the husband, or waiver/estoppel should defeat the respondent's claim. It also rejected the Trust's proposition that the judge should have remitted the Regulation E3 certification question for Wednesbury review, as there was no evidence on appeal that the Trust would in fact have made such a certificate.

Appeal dismissed. The majority concluded that termination by notice sent by post required effective receipt at the employee's address (subject to the usual rebuttable presumption that a properly posted letter arrives in the ordinary course), and on the facts the judge was entitled to find that the dismissal letter was not communicated to the respondent until 27 April 2011; consequently the notice period did not expire before her 50th birthday and she was entitled to the higher pension. Other grounds (waiver, estoppel and Regulation E3 certification) failed on the evidence.

Appeal from HHJ Raeside QC (order dated 27 May 2015) in the High Court of Justice, Chancery Division (Leeds District Registry). Permission to appeal refused below but subsequently granted by Patten LJ on 5 November 2015; appeal heard in the Court of Appeal 14–15 February 2017, judgment 17 March 2017 ([2017] EWCA Civ 153).