08 May 2018

An issue that has vexed employment lawyers for some time is when does notice of termination of employment take effect. There are a number of possible answers to this question. Assuming the contract of employment is silent on this point, is notice effective when the letter communicating the decision would have been delivered in the ordinary course of post, or is it when as a matter of fact the letter was delivered or is it when the employee actually reads it or when the employee ought reasonably to have read it? This issue was recently considered by the Supreme Court.

The facts

In April 2011 the Claimant was told she was at risk of redundancy. The Claimant was 49, turning 50 on 20th July. If she was dismissed by reason of redundancy after her 50th birthday she would receive an enhanced pension. Thus the timing of her dismissal was critical. In terms of her contract of employment the Claimant was entitled to 12 weeks’ notice. The Claimant’s contract of employment was silent about how notice was deemed to be given.

On 19 April the Claimant went on holiday. The next day the Respondent sent notice of termination of her employment contract by recorded delivery and by ordinary post. The Claimant did not read the letter until 27 April.

The key question therefore was when notice was effective.

The law

The issue was considered by the Supreme Court who were not unanimous. The existing authorities were considered and the majority decided not to alter the established approach which is that notice is only deemed to be effective when it was read (or when the Claimant ought reasonably to have read it).

In this case as the Claimant could not have read the notice until she returned from holiday, notice was not effective until she had read it which resulted in her being entitled to the higher sums.

Going forward

Employers should therefore take care when issuing notices of termination in cases where the date of termination can affect pension or other entitlements. Checks should be carried out to identify what the employment contract says about when notice is deemed to be effective and steps taken to ensure that the notice is appropriately communicated.

The full judgment can be read here.

To discuss further please contact one of our BTO employment lawyers on 0141 221 8012.