Haywood v Newcastle upon Tyne Hospitals NHS Foundation Trust

The Supreme Court decided that, in the absence of an express contractual term to the contrary, a term is to be implied into contracts of employment that a notice of termination given by an employer takes effect only when the notice comes to the employee's attention and the employee has read it or had a reasonable opportunity to do so. The Court rejected the employer’s contention that the common law required notice to take effect simply when a letter was delivered to the employee’s address. The Court also held that, on the facts, the person who collected the Trust’s recorded-delivery letter was not acting as the employee’s agent for receipt of the letter.

The decision was reached after a survey of historical non-employment authorities, relevant employment case-law (including the EAT line of authorities from Brown onwards), and consideration of the distinction drawn in Gisda Cyf v Barratt between statutory construction and the common law. The majority concluded that the EAT approach—requiring actual receipt/read or a reasonable opportunity to read—is the correct implied contractual rule for employment contracts terminable on notice, while one Lord Justice dissented favouring deemed delivery on due postal delivery.

Background and facts:

• The Trust employed Mrs Haywood; shortly after her employment transferred to the Trust her post was identified as redundant. If her employment terminated on or after her 50th birthday (20 July 2011) she would qualify for a non-actuarially reduced early retirement pension.
• The Trust posted (recorded delivery) a letter of termination dated 21 April 2011 while Mrs Haywood was on pre-notified holiday abroad (18–27 April). A recorded-delivery slip was left; a relative collected the parcel from the sorting office on 26 April and left it at her home. Mrs Haywood returned early on 27 April and read the letter that morning.

Procedural history:

• Employment Tribunal claims were not pursued.
• High Court (His Honour Judge Raeside QC) gave partial judgment (27 May 2015) implying a term that an employee must actually be informed or have a reasonable opportunity to see the dismissal letter; he declared Mrs Haywood employed on 20 July 2011 and made consequential pension orders, stayed pending appeal (Case No 3BM30070).
• Court of Appeal ([2017] EWCA Civ 153) dismissed the Trust’s appeal by majority (Proudman and Arden JJ) with Lewison LJ dissenting.
• The Trust appealed to the Supreme Court. The Supreme Court ([2018] UKSC 22) dismissed the appeal by majority (Lady Hale and Lady Black), Lord Briggs dissenting.

Nature of the application / relief sought:

• Mrs Haywood sought a declaration that her 12 weeks’ notice began on 27 April 2011 (when she read the letter), so that her employment continued until 20 July 2011, entitling her to an unreduced early retirement pension.

Issues framed by the Court:

1. Whether, at common law, notice given by written letter posted to the employee’s home takes effect when the letter would have been delivered in the ordinary course of post, when it is actually delivered to that address, or only when it comes to the employee’s attention and the employee has read it or had a reasonable opportunity of doing so.
2. Whether, on the facts, the person who collected and signed for the Trust’s recorded-delivery letter was acting as the employee’s agent.

Reasoning and conclusions:

The majority examined (i) historic non-employment authorities, often in the landlord-and-tenant field, (ii) statutory provisions creating presumptions about postal service, and (iii) a consistent line of Employment Appeal Tribunal authority (from Brown v Southall & Knight onwards) which required actual receipt or a reasonable opportunity to read an employer’s letter of dismissal. The Court emphasised Gisda Cyf v Barratt was a statutory construction decision limited to the Employment Rights Act 1996 context and did not determine the contractual common law position. Applying principles of what terms the law implies into employment contracts and considering policy (certainty, fairness and practicality), the majority held that the implied term should reflect the established EAT approach: notice takes effect when it comes to the employee’s attention and she has had a reasonable opportunity to read it. The majority also held, on the available evidence, that the relative who collected the letter was not the employee’s agent for receipt.

Dissent: Lord Briggs concluded the correct common law implied term is that notice is given when the document is duly delivered to the employee’s address (or to an agent at that address), relying on the long historical line of authorities and on statutory rules deeming delivery by post.

Appeal dismissed. The Supreme Court (majority) held that, absent express contractual provision, a term is to be implied into contracts of employment that a written notice of termination given by the employer takes effect only when it comes to the employee’s attention and the employee has read it or had a reasonable opportunity to do so; on the facts the employee did not receive the notice until 27 April 2011. The Court also held that the person who collected the recorded-delivery letter was not the employee’s agent for receipt.

High Court (partial judgment, His Honour Judge Raeside QC) 27 May 2015 (Case No 3BM30070); Court of Appeal dismissed the Trust’s appeal [2017] EWCA Civ 153 (majority Proudman J and Arden LJ; Lewison LJ dissenting); appeal to the Supreme Court [2018] UKSC 22 dismissed (majority Lady Hale and Lady Black; Lord Briggs dissenting).