In a majority decision the Supreme Court of the United Kingdom has held that notice of termination of employment takes effect when it has actually been received by the employee and the employee has either read or had a reasonable opportunity of reading it.

Delivering the majority decision in Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood [2018] UKSC 22, Lady Hale stated that "given the vast numbers of working people who might be affected by this issue, it is perhaps surprising that it has not previously come before the higher courts."

The Supreme Court had previously held, in Gisda Cyf v Barratt [2010] UKSC 41; [2010] ICR 1475, that the “effective date of termination” for the purpose of unfair dismissal claims under the Employment Rights Act 1996 was the date on which the employee opened and read the letter summarily dismissing her or had a reasonable opportunity of doing so. The Court had been careful to limit that decision to the interpretation of the statutory provisions in question.

In the court's latest decision, the respondent had been dismissed by reason of redundancy. Her contract of employment provided for termination on a minimum period of notice of 12 weeks but did not state how such notice should be given.

The appellant Trust sent a letter giving written notice of termination by recorded delivery to Mrs Haywood's home address on 20 April 2011. The Trust was aware she was away on holiday. The letter was collected from the local sorting office by Mrs Haywood's father-in-law on 26 April 2011 and he left it in the house that day. She returned from holiday on 27 April 2011 and read the letter.

The date on which the 12-week notice period started to run was very important. If it commenced on 27 April 2011, it expired on 20 July 2011 - which was the date of Mrs Haywood's 50th birthday, and she became entitled on that date to claim a non-actuarially reduced early retirement pension.

The Trust argued that the common law rule - derived from landlord and tenant cases - provided that notice was given when the letter was delivered to its address.

However, the three judge majority held that the approach which had been consistently taken by the Employment Appeal Tribunal was correct:

• The common law rule in non-employment cases was not as clear and universal as suggested.

• The Employment Appeal Tribunal was an expert tribunal familiar with employment practices, and with the general merits in employment cases.

• Mrs Hayward's employment contract with the Trust was concluded when the Tribunal cases were thought to represent the general law.

• There was no reason to suppose that this approach had caused any real difficulties in practice.

• It was important for both employer and employee, even in dismissal on notice cases, to know whether and when the employment had come to an end. The rule should be the same as for summary dismissal cases.

Lady Black delivered a judgment which agreed with Lady Hale's conclusion and reviewed the common law cases in more detail (at [41] to [75]). Insofar as any clear principle emerged, it revolved around delivery to the recipient's agent, who might be a household servant, professional agent or family member, who would be expected to take in communications for the intended recipient as part of their role (at [75]).

Lords Briggs and Lloyd-Jones (agreeing with Lord Briggs) dissented. Lord Briggs said the common law cases had long established a rule embedding an implied term into contracts of employment determinable on notice (at [78]). Such contracts were only a sub-species of relationship contracts. The rule for relationship contracts was that written notice of termination was given when the document containing it was duly delivered by hand or post to the address of the intended recipient, regardless of whether either the intended recipient or his agent was there to receive it (at [81] and [100]).