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Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood [2018] UKSC – what are the implications of the Supreme Court’s judgment?

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Nathaniel Caiden considers today’s Supreme Court judgment in Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood [2018] UKSC in which Caspar Glyn QC and Tom Brown successfully represented Mrs Haywood.

Today’s Supreme Court judgment has identified a standardised implied term when giving written notice of dismissal (i.e., a term implied into all contracts unless there is express provision to the contrary):

There is an implied term that written notice runs from the date it is read, or if earlier, the date one had a reasonable opportunity of reading it

(see Lady Hale at [21], [39]-[40], giving a majority judgment with which Lady Black and Lord Wilson agreed; Lord Briggs and Lord Lloyd-Jones dissented).

The relevant factual background was that:

  • Mrs Haywood was employed by the NHS trust.
  • There was no express term in the contract under which she was employed as to how written notice was to be given and in terms of when it ran.
  • The Trust issued a written notice of dismissal by recorded delivery.
  • Mrs Haywood had a 12-week notice period, and if the written notice of dismissal was taken to run from 27 April 2011, she would receive a non-actuarially reduced early retirement pension (but not if notice was received before 27 April).
  • Mrs Haywood was away when the letter was sent on 20 April 2011. Her father in law collected the letter from the post office on 26 April 2011 and Mrs Haywood read it on her return home on 27 April 2011.
  • In light of the Supreme Court’s implied term (and different terms implied by the trial judge and the Court of Appeal), notice ran from 27 April 2011, as Mrs Haywood did not have a reasonable opportunity of reading it before then.

However, the result of this implied term and this case causes one to wonder what implications this case could have?  Turning our minds to this, it seems that it could result in the below.

Firstly, it must be appreciated that the case concerned a common law implied term. This is an area where express terms are king and it is clear that this particular implied term cannot overwrite express terms as to notice. This point was clearly flagged by Lady Hale at [3]. The result is that, much like following Geys v Société Générale, London Branch [2012] UKSC 63, one expects that it may become more common for standard-form employment contracts to be amended to provide certainty for employers – that is, to make it clear that notice runs from a particular date after a written notice is sent, with rebuttable or irrebuttable presumptions (or deeming provisions) as to delivery. Employees may need to be advised to negotiate terms about written notices which guarantee them actual receipt, rather than deemed receipt, especially where valuable benefits can depend on the timing of receipt of a notice.

Secondly, in respect of subsisting employment contracts, employers may face difficulties where an employee cannot be contacted: what of employees who are hospitalised, or have gone AWOL or are on sabbatical, or are signed off work with a requirement that the employer does not contact them? These issues may need to be clarified in future cases. So may the question when an employee has had a reasonable opportunity to read a letter—what of the employee who is unable to summon up the courage to read a letter for health reasons? What of the interplay between this implied term and disability discrimination?    

Thirdly, the Supreme Court’s decision may lead to a change in HR practice when giving notice. It is common for dismissal to be confirmed by letter. Additionally, people are usually given the exact notice as required by the contract and not ‘more notice’.  However, the present case may lead to a shift in culture: as counsel for Mrs Haywood argued, if an employer wants greater certainty there is nothing to stop it telling the employee face to face and handing over a letter at the same time (if the contract requires written notice) and one can give more notice than required setting out a clear end date (Lady Hale at [37]). These points influenced Lady Hale’s conclusion at [39] (see [39(5)] in particular). In large-scale dismissals, how in practice will employers achieve certainty where there is no express term overriding the standardised implied term?

Fourthly, Lord Briggs in particular acknowledges that developments in technology mean that electronic communication (with the greater proof offered by read receipts, server receipts and so on) may soon replace written letters and the need for deeming provisions will be reduced. Although the Trust sent a copy of the written notice by email, in fact, the Supreme Court did not consider the consequences of this at all (and were not invited to do so). Are we about to enter the age of dismissal by WhatsApp and Twitter?

Fifthly, the decision may affect statutory rights. The majority of the Supreme Court were persuaded in part by cases decided in the statutory employment protection context.  Of course, the Employment Rights Act 1996, in s.86, sets out statutory contractual terms as to minimum notice. Since such a term is incorporated into the contract, one can sue under the contract (see Westwood v Secretary of State for Employment [1985] AC 20), and for certain purposes the statutory minimum period of notice required can alter the date of the effective date of termination (see s.97(2), Employment Rights Act 1996).  So one can foresee a future case where an employee who is given two weeks’ written notice, which is said to expire before getting unfair dismissal rights, argues that in fact the notice should not be taken as starting to run until a later date when he/she read the notice of dismissal (and had a reasonable opportunity of reading it) and thereby extend the effective date of termination despite clear wording in the written notice of dismissal that the contract ends before that date.

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