The precise date on which notice of termination takes effect in an employment contract is an important question. It often determines if and when claims can be brought in an Employment Tribunal and in the Courts, as there are limitation periods for claims (mostly 3 months in an Employment Tribunal).
Parties to a contract can determine in the contract when notice of termination is deemed to have taken effect. If, however, the contract is silent on that point then the Courts have to decide when the notice of termination is deemed to have been effective. There has been an ongoing debate in law about this point, but the Supreme Court has recently (by a majority of 3 to 2 only) upheld the Court of Appeal’s previous decision; where the contract is silent the notice is effective when it comes to the attention of the employee and he or she has read it (or had the reasonable opportunity to do so).
The case was Newcastle upon Tyne NHS Foundation Trust v Haywood. In the case a Miss Haywood was told she was at risk of redundancy. She turned 50 on 20th July 2011. Redundancy after her 50th birthday would entitle her to considerably more generous pension than the redundancy beforehand. She was entitled to 12 weeks’ notice but her contract was silent on how notice was deemed to be given. On 19th April 2011 Miss Haywood went on holiday, on 20th April her employer sent notice of termination by recorded delivery but she only read that on her return from holiday on 27th April. If notice was deemed effective before 27th April she would have lost the extra money and received a much lower pension, if it was deemed effective when she read it on return from holiday she would receive the much more generous pension.
The Supreme Court found in favour of the employee supporting previous case law to the effect that notice was only effective when it was read by the employee (or he/she had a reasonable opportunity to read it).
Employers may therefore want to consider strengthening notice clauses to make clear as a contractual term the method by which notice is deemed effective. It also bolsters the argument that when terminating employment, in the absence of any provision stating when notice is deemed effective, the employer should communicate the decision by various means e.g. orally and/or other forms of written communication email, recorded delivery, first class post, to avoid employee arguments that they have not been issued notice.
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