Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood [2018] UKSC 22

Mrs Haywood, facing redundancy, was on holiday when her employer's termination letter was delivered. She read it on her return, on her 50th birthday threshold date. The Supreme Court held notice ran only when she actually read it, entitling her to an enhanced pension.

Facts

Mrs Haywood was a long-serving NHS employee whose employment transferred to the Newcastle upon Tyne Hospitals NHS Foundation Trust on 1 April 2011. Her contract required a minimum of 12 weeks’ notice of termination but did not specify how notice was to be given or when it would take effect. Shortly after the transfer, her post was identified as redundant. Critically, if her employment terminated on or after her 50th birthday (20 July 2011), she would be entitled to a non-actuarially reduced early retirement pension; if earlier, she would not.

Mrs Haywood had informed the Trust she would be on holiday in Egypt from 19 to 27 April 2011. On 20 April 2011, the Trust issued written notice of termination by recorded delivery. A delivery card was left at her home on 21 April. Her father-in-law, Mr Crabtree, collected the letter from the sorting office on 26 April and left it at her house. Mrs Haywood returned in the early hours of 27 April and read the letter later that morning. Notice given on or after 27 April would expire on or after her 50th birthday.

Issues

The central issue was when, as a matter of the common law of contract, written notice of termination sent by post is ‘given’ where the contract contains no express provision: (i) when the letter would have been delivered in the ordinary course of post; (ii) when it was in fact delivered to the address; or (iii) when it came to the employee’s attention or she had a reasonable opportunity of reading it.

A secondary issue was whether Mr Crabtree had acted as Mrs Haywood’s agent in collecting the letter, such that delivery to him constituted delivery to her.

Arguments

The Trust

The Trust argued that a common law rule, derived principally from historic landlord and tenant authorities, established that notice is given when the letter is delivered to the recipient’s address, regardless of whether the recipient reads it. It relied on statutory analogues (including the Interpretation Act 1978 and Law of Property Act 1925) which deem service effective upon delivery. Certainty, fairness and consistency with employers’ ability to effect simultaneous dismissals were invoked as policy considerations.

Mrs Haywood

Mrs Haywood contended that the common law authorities relied upon were not as clear-cut as suggested, many being explicable as cases of service on an authorised agent. She relied on a consistent line of EAT authority from Brown v Southall & Knight [1980] ICR 617 onwards, holding that written notice from an employer takes effect only when the employee has read it or had a reasonable opportunity to do so.

Judgment

The Supreme Court dismissed the Trust’s appeal by a majority of three to two (Lady Hale, Lord Wilson and Lady Black; Lord Briggs and Lord Lloyd-Jones dissenting).

The agency point

The Court unanimously held that Mr Crabtree was not acting as Mrs Haywood’s agent for the receipt of the letter; on the evidence he acted on his own initiative.

The majority reasoning (Lady Hale)

Lady Hale surveyed the non-employment authorities and concluded that the common law rule was not as clear and universal as the Trust suggested. Receipt in some form was always required, and in many cases there was someone at the address authorised to receive the notice. Even the Interpretation Act presumption was rebuttable.

She then reviewed the consistent line of EAT authority since 1980 (Brown v Southall & Knight, McMaster v Manchester Airport plc, Hindle Gears Ltd v McGinty, Edwards v Surrey Police, and Sandle v Adecco UK Ltd), which had consistently held that notice from an employer must actually be received and read, or a reasonable opportunity to read afforded. The EAT is an expert tribunal familiar with employment practices, the contract was concluded when those cases were thought to represent the general law, and there was no evidence the approach had caused real practical difficulties. Employers wishing for greater certainty could include express contractual provisions governing service.

Lady Hale emphasised the importance, recognised in Geys v Société Générale, of both parties knowing whether and when the employment has ended. She concluded that notice came to Mrs Haywood’s attention on 27 April 2011, meaning the 12-week notice period expired on her 50th birthday.

Lady Black’s concurring judgment

Lady Black undertook a detailed re-examination of the old authorities (including Jones d Griffiths v Marsh, Doe d Buross v Lucas, Doe d Neville v Dunbar, Papillon v Brunton and Tanham v Nicholson). She concluded that, to the extent any clear principle emerged, it concerned delivery to the recipient’s agent, and not merely delivery to the address. The supposed common law rule on which the Trust relied did not clearly emerge from the older cases.

The dissent (Lord Briggs, with Lord Lloyd-Jones)

Lord Briggs would have allowed the appeal. On his analysis, the common law has, for over two centuries, implied into ‘relationship contracts’ terminable on notice a term that written notice is given when the document is duly delivered to the recipient’s address, irrespective of when the recipient reads it. He regarded the older authorities as establishing a general rule applicable to ‘ordinary civil notices’ (quoting Lord Westbury in Tanham v Nicholson). He viewed the employment cases as overwhelmingly concerned with summary termination rather than termination on notice, and distinguishable. He emphasised the importance of certainty for both parties and the allocation of risk to the party whose address had been nominated for delivery.

Implications

The decision establishes that, where an employment contract terminable on notice contains no express provision governing how and when written notice takes effect, the common law implies a term that notice runs from the date the employee actually receives and reads the letter, or has had a reasonable opportunity to do so. The same rule applies whether the dismissal is summary or on notice.

The practical consequences are significant for employers. To avoid uncertainty, employers should include express contractual provisions governing the methods of giving notice and the point at which such notice is deemed received (for example, by deeming service on delivery to the last known address, or by specifying a fixed number of days after posting). Where no such term exists, employers cannot rely on posting or even successful delivery to start the notice period; they must ensure the employee has had the opportunity to read the notice.

The decision also aligns the common law position with the statutory interpretation of ‘effective date of termination’ under the Employment Rights Act 1996, as established in Gisda Cyf v Barratt, avoiding the anomaly of different rules applying to statutory and contractual analyses of the same event.

The judgment is narrowly tied to situations where there is no express contractual provision; parties remain free to draft their own regimes for service, as was done in Geys. The majority was cautious not to overreach: it did not lay down a universal rule for all ‘ordinary civil notices’ but identified the appropriate implied term for employment contracts. The existence of a sharp dissent by Lord Briggs and Lord Lloyd-Jones reflects continuing debate as to whether the same rule ought to govern wider classes of relationship contracts.

The case is important because it clarifies a previously unsettled point affecting millions of employment contracts, and reinforces the protective approach taken by the courts and EAT to employees facing dismissal, particularly where significant consequences (such as pension entitlement) turn on the precise date of termination.

Verdict: The appeal was dismissed. The Supreme Court held, by a majority, that written notice of termination of employment, in the absence of an express contractual term, takes effect only when the employee has personally received the letter and either read it or had a reasonable opportunity to do so. Mrs Haywood’s 12-week notice period therefore did not begin until 27 April 2011 and expired on her 50th birthday, entitling her to the non-actuarially reduced early retirement pension.

Source: Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood [2018] UKSC 22