If an employer issues notice to an employee in writing, when will notice actually start to run?
The date on which notice starts is, obviously, crucially important to determining when it will end and, therefore, the date on which the employment contract terminates. For statutory purposes (such as determining the ‘effective date of termination’ for unfair dismissal claims) notice given in writing only starts to run when (i) the employee actually reads the employer’s letter or (ii) to avoid employees deliberately evading the employer’s attempt to issue notice, when the employee has had a reasonable opportunity to become aware of the contents. In 2010 this approach was confirmed by the Supreme Court in the case of Gisda Cyf.
However, the Supreme Court judgment in Gisda Cyf was only dealing with what test to apply for statutory purposes. It wasn’t attempting to specify what test should be applied where the determination is undertaken for contractual purposes. This point has now been considered by the Supreme Court in the very recent case of Tyne Hospitals NHS Foundation Trust v Haywood.
Facts of the case
Mrs Haywood was employed by Tyne Hospitals NHS Foundation Trust. It made her redundant and issued her with notice via a letter sent to her home address. She was on holiday abroad when the letter arrived and didn’t read it until after she returned home. The parties agreed she was entitled to 12 weeks’ notice but disagreed about when it had started to run and, therefore, when her employment ended. Her termination date had particular financial significance because if dismissal took effect before her 50th birthday Mrs Haywood would not be contractually entitled to enhanced pension benefits, whereas if her employment did not end until on or after her birthday, she would be. The financial sum at stake was very substantial and her contract of employment said nothing about the position if notice was served by post.
The Supreme Court held that in cases where an employer serves notice in writing and the contract doesn’t specify when notice will start to run, courts should apply the same test for contractual purposes as for statutory purposes – the Gisda Cyf test (see above). In Mrs Haywood’s case, the effect was that her notice did not start until she read the Trust’s notice letter, and that meant that when her dismissal actually took effect, she had become contractually entitled to the enhanced benefits.
The Supreme Court judgment makes clear that it applies to the ‘default’ position i.e. where the contract of employment doesn’t specifically address when notice will start to run if it is issued in writing. However, it also makes equally clear that employers have the option (for contractual purposes, that is) of drafting contractual provisions to specify an alternative position.
Employers may therefore want to consider reviewing their contractual terms and conditions in light of this judgment. They could, for instance, specify that if notice is given in writing it will be deemed to start, for contractual purposes, say, two days after posting by first class post.
Reviewing terms and conditions is likely to be of particular interest to employers who offer generous contractual benefits but may also be worthwhile where employers give a contractual notice period that significantly exceeds the statutory minimum. Although an express contractual clause will not disapply the Gisda Cyf test for statutory purposes, the employer may at least be able to start a longer contractual notice period running.
Posted on 11/05/2018 in Legal UpdatesBack to Knowledge