Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood

In the absence of an express contractual term governing receipt, written notice of dismissal sent by an employer takes effect when it comes to the employee’s attention and the employee has read it or had a reasonable opportunity to do so. Delivery to the employee’s home does not by itself start the notice period.

The parties may displace this standard implied term by expressly prescribing how notice is to be given and when it is deemed effective. The rule promotes clear communication of dismissal and applies consistently to notices given by employers, whether dismissal is immediate or on notice.

The Trust gave Mrs Haywood 12 weeks’ written notice of redundancy by recorded delivery while knowing that she was abroad. The letter was collected from the sorting office and left at her home on 26 April 2011. She returned and read it on 27 April. If notice began on the latter date, her employment continued until her 50th birthday and she qualified for an unreduced early retirement pension.

The High Court held that she had to be informed of the dismissal and have a reasonable opportunity to read the letter. By a majority, the Court of Appeal dismissed the Trust’s appeal: [2017] EWCA Civ 153. The Supreme Court had to determine when, absent an express contractual term, an employer’s postal notice of termination takes effect.

1. Appeal dismissed by a majority of three to two. Lady Hale, with whom Lord Wilson and Lady Black agreed, held that the standard term implied into an employment contract is that an employer’s written notice of termination takes effect when it comes to the employee’s attention and the employee has read it or had a reasonable opportunity to do so. The letter first satisfied that requirement on 27 April 2011.
2. The historic non-employment authorities did not establish a clear and universal common-law rule that delivery to a private address was sufficient. Receipt in some form was required, often through a person authorised to receive the communication. Statutory and contractual provisions deeming postal service effective on delivery did not determine the term to be implied into an employment contract.
3. The Employment Appeal Tribunal had consistently required, since Brown v Southall & Knight, that an employer’s notice be read or that the employee have a reasonable opportunity to read it. That expert and workable line of authority had operated in several employment contexts without demonstrated practical difficulty. It was appropriate to adopt it as the contractual rule.
4. The rule advances the important requirement that both parties know clearly whether and when the employment relationship has ended. An employer seeking greater certainty may prescribe expressly both the permitted method of notice and the time at which it is deemed received. It may also arrange for notices to expire on a common specified date.
5. The Court unanimously rejected the separate agency ground. On the available evidence, the person who collected the letter while Mrs Haywood was abroad was not acting as her agent for receiving it.
6. Lord Briggs, with whom Lord Lloyd-Jones agreed, dissented. He considered that a long-established term applicable to relationship contracts made written notice effective upon due delivery to the recipient’s home or business address. In his view, employment authorities concerning summary dismissal and the statutory effective date of termination did not govern termination on notice.

1. United Kingdom Supreme Court: By a majority of three to two, dismissed the Trust’s appeal and upheld the result below: [2018] UKSC 22.
2. Court of Appeal: By a majority, dismissed the Trust’s appeal from the High Court: [2017] EWCA Civ 153. Proudman J required communication of the letter’s contents; Arden LJ required receipt; Lewison LJ dissented and regarded arrival at the correct address as sufficient.
3. High Court: His Honour Judge Raeside QC held that Mrs Haywood had to be informed of her dismissal and have a reasonable opportunity to look at the letter. He declared that she remained employed on her 50th birthday and ordered pension payments, subject to a stay pending appeal. No neutral citation is stated.