A case on service of a Notice to terminate a Contract of Employment … and yes, it's interesting!

5 April 2017

Surprisingly the case of  Newcastle upon Tyne NHS Foundation Trust v Sandi Hayward was a most enjoyable read.  In many ways it was a journey back to yester-year when there were so many decisions that turned on when letters may or may not have been delivered or received, with significant consequences turning upon the results.  By and large there are far fewer decisions in this respect since the advent, and almost universal usage, of email.

This case revolved around when a letter terminating a contract of employment had in fact been received, and took effect.

The facts of the Case

The Employee (who was the Respondent), was a former nurse and midwife. More recently, she had a role in business development for community services with both Newcastle and North Tyneside Primary Care Trusts.

There was a merger between two NHS bodies, and the employee's contract was transferred to the Appellant (the “PCT”) on 1 April 2011.

Subsequently, the Respondent was informed by letter that she was at risk of redundancy.

The Respondent told the PCT that she would be on annual leave from 19 April until (depending upon which document you read) 3 or 5 May 2011.  She asked that no decision be made in her absence (as to her proposed redundancy), although her employers did not agree to this. Unknown to the PCT, the Respondent wanted to have a communication-free break and in that respect, the Judge found that she had not unreasonably avoided receiving the notice that was subsequently served upon her.  There was no appeal on that point.

In any event, after a presumably difficult meeting with her employers, she began sick leave on 13 April 2011.  On her case, this was brought on by the stress of the meeting.  She commenced her annual leave on 18 April and flew to Egypt the following day, (19 April) for one week.  She was due to return on 26 April, but actually arrived back on 27 April. She remained on sick leave until 20 May 2011.

The principal issue for the Judge was whether the Respondent had received her contractual 12 weeks’ notice of dismissal for redundancy, before 20 July 2011 when she became 50.  This was important, because if the notice period expired before her 50th birthday, she would receive a lower pension.

In the event the High Court Judge, who was sitting in Leeds District Registry, decided that notice was given once the Respondent had actually read the letter of dismissal on 27 April 2011; it was at that point the contents were communicated to her.

Just to be clear, three letters were sent by the Appellant to the Respondent.  One was sent by standard mail. Nothing turned on that letter, and no findings of fact were made as to when that was received. Another was sent by recorded delivery. The Respondent’s father-in-law, a Mr Sydney Crabtree, collected that letter from the Sorting Office on 26 April 2011.  He left it for the Respondent at her home.  That letter, as with the others, purported to terminate the Respondent's contract with 12 weeks’ notice, terminating on 15 July 2011.  On that basis, expiry of the notice period, would have come before the Respondent's 50th birthday.  The other letter was sent by email to the Respondent's husband's address. He did not access it until after the recorded delivery letter had been read.

So the Respondent said she opened the recorded delivery letter at 8:30 am on 27 April 2011.  Her husband did not read the emailed letter until 10:14 am, again on 27 April 2011.

The PCT unsuccessfully appealed the decision of the High Court Judge. There were three Appeal Judges and each took a different view in this case.

Mrs Justice Proudman found that the letter of dismissal had to be actually communicated to the employees before it took effect.  The Respondent was therefore entitled to receive her pension at the higher rate, as there was no communication before 27 April. Accordingly notice did not expire before her 50th birthday.

Lord Justice Lewison took a different view.  In his judgment, notice was validly given under the contract when a letter containing the notice actually arrived at the correct destination, whether the recipient was there to open it or not.  So in his view, notice was given when either the letter was sent by ordinary post and arrived at the Respondent's home, or on 26 April 2011, when her father-in-law fetched the recorded delivery letter from the Sorting Office and left it at her home.  In either case, that was before 27 April  and accordingly, he would have allowed the appeal.

However, Lady Justice Arden decided to dismiss the appeal. She did so for different reasons to Mrs Justice Proudman.  She considered that the first instance Judge had been right on the issue of the time when the PCT's termination of the Respondent’s employment contract took effect.  In her view, merely because the letter, by the intervention of Mr Crabtree, did reach its destination, did not mean that the Respondent received it at the time that he left it at her house.  Rather, the position under the general law in her view, was that the fact of delivery gave rise to a "rebuttable presumption of receipt."

She referred to the "fork in the road” where she took one path, and Lewison LJ another.  The difference in approach between them, was that she took the view that the authorities established that if notice is physically delivered to a person's home, it is not necessarily received by him.

It was Lady Justice Arden's view, that when a letter is shown to have been sent to a person's last known address, and to have been delivered there, the law would presume unless the contrary was shown, that the party to whom the notice was addressed, would have received it.  But it is a rebuttable presumption.  What happens in that situation is that the evidential burden shifts to that person to show he or she had not received it. It might after all, according to Arden LJ, have been eaten by the dog or swept away by a visiting plumber. (She may, one suspects, have had the recent worker status case of Pimlico Plumbers ringing in her ears at that point.)

She observed that a notice which arrived at a person's home, may not come to the deliveree’s attention, through no fault of their own.  She gave another example here, as she postulated the notice may be left on the doorstep and be blown away. It was open to an employer to protect itself by incorporating a suitable term in the contract of employment, or using a method of delivery that requires the employee to receive the notice, and certainly not by leaving the notice to the very last minute, as happened in this particular case. 

Lady Justice Arden saw nothing in the authorities to the effect that once notice had been delivered to a person's home, there was an irrebuttable presumption that it was received by that person.

It seemed to her that because there was no finding that Mr Crabtree had authority to receive the notice of termination for the Respondent, the Judge was entitled to look to the time when the Respondent found the letter containing the notice. She was entitled to hold that in all the circumstances the Respondent did not receive the notice, which seemed to her to mean accept delivery of it, until 27 April 2011.  The Respondent had arrived home in the early hours of the morning after a long, delayed and re-routed flight from Egypt.  She was therefore not likely to have looked for her post at that point.  The PCT knew she was due to be in Egypt, or at least there was a substantial risk that she would not be at home when the letter was expected to arrive.  The letter was not delivered by the Post Office, but arrived at her house due to the fortuitous action of Mr Crabtree, whom it was not argued, was for this purpose, her agent.

27 April was both the date she arrived home, and also the date she read the letter.  If she saw it on arrival at 1:30 am that will be the time when she received it.  But the only holding was that she received it at about 8 am that day.  The law took no account of the parts of the day, and so the Judge did not have to make a choice between these two times.  Lady Justice Arden accepted that the Respondent did not need to read the letter, but she, or an agent, did need to receive it.

The appeal was therefore dismissed. According to a Newcastle newspaper at the time, this meant the Respondent was awarded £400k and the PCT was saddled with a costs bill of the same amount.

However, they also report that the PCT is planning to take its case to the Supreme Court. So it looks like this 6 year battle is likely to take a while longer to resolve…


The moral of the story?  Check your contracts of employment really carefully and make sure they contain a proper provision specifying exactly how notice may be served, and precisely when it is deemed to have been delivered!

Further information

For more information on the issues raised in this blog, please contact Richard Fox or any member of our employment team.

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