The Supreme Court in the recent case of Newcastle upon Tyne Hospital NHS Foundation Trust v Haywood held that a new term is to be implied in all employment contracts in relation to terminating employment. It was held that notice to terminate employment will only start to run from the date that an employee has received a letter and has had a reasonable opportunity to read it.
In this case Mrs Haywood had worked for the NHS for 30 years. Following the merger of two NHS bodies, Mrs Haywood was informed that she may be made redundant. If Mrs Haywood’s employment terminated before her 50th birthday she would not be entitled to receive a reduced early retirement pension in the sum of approximately £400,000.
Mrs Haywood was entitled to 12 weeks statutory notice to terminate her employment. The Trust issued notice to terminate Mrs Haywood’s employment on 20th April which was sent by recorded delivery and to her husband’s email address. As Mrs Haywood was away on a pre-planned holiday from the 18th April to 27th April, the letter was collected from the Post Office by her father and she read the letter on the 27th April when she arrived back from her holiday. If the written notice of dismissal was taken to run from the 27th April then Mrs Haywood would have been entitled to receive the reduced early retirement pension.
The Trust therefore argued that the notice was effective from the date of delivery which in this case was the 26th April however Mrs Haywood argued that it was effective from the date that she had read the letter. The High Court and Court of Appeal ruled in Mrs Haywood’s favour as this was reasonable.
The Supreme Court held that this will now be implied into every contract of employment unless the contract between the parties expressly provides otherwise.
This case highlights that although an employment contract consists of express terms, terms can be implied into a contract where epress terms are incomplete and therefore clarity is key.
It is important to ensure that contracts of employment set out how notice can be served and when it be deemed to have been received to avoid implications arising from implied terms.
If you'd like further information, please contact Gareth Dando on 01484 558 060 or email gareth.dando@ramsdens.co.uk.