The rules for determining whether or not employment is continuous are set out in Sections 210 to 219 of the Employment Rights Act 1996. Generally speaking, such a period begins with the day on which the employee starts work, but the end of the period is to be determined in accordance with those sections.
Section 210 (4) provides that “… a week which does not count in computing the length of a period of continuous employment breaks continuity of employment”.
Section 212(1) provides that “any week during the whole or part of which an employee’s relations with his employer are governed by a Contract of Employment counts in computing the employee’s period of employment”.
The Act provides that various periods involving a temporary cessation of work, for example due to sickness or injury or other absences, may not interrupt the continuity of employment in certain circumstances.
In the recent case of Welton -v- Deluxe Retail Limited, the EAT had to consider a situation in which Mr Welton had been dismissed by the Respondent at its Sheffield store as a result of that store closing down. However, within a week of the closure, he had been offered, and had accepted, another job with the same company to work at its Blackpool store. However, he did not start work at that store until nearly two weeks after he had finished his job in Sheffield.
He was dismissed a few months later after working for fewer than 12 months with the new store. Therefore, any claim that he might have had for unfair dismissal depended on him being able to establish that he had had continuous service, including that which he had acquired whilst being employed in Sheffield. The employer argued that the two week gap was a break in the continuity of his employment.
The key part of the decision so far as continuity was concerned related to the date upon which Mr Welton decided to accept the offer to work in the Blackpool Store. Although he did not start work until almost two weeks later, the position was that his relations with the employer were from that point “governed by a contract of employment” and therefore the intervening weeks between the two jobs were regarded as weeks which could be counted as part of his continuous employment. The two week gap did not break the continuity of his employment.
Consequences
It is not difficult to think of other situations in which this decision might be relevant. For example, a situation in which discussions take place with an employee and it is agreed that he will cease work, take his pension and return to work as a “consultant” on reduced hours. Often the outcome of the discussions is that a package is agreed which includes the offer of the new position; the terms upon which this will be entered into are agreed at the same time as the employee’s departure from his previous employment.
In these cases, it is not uncommon for there to be a gap between the expiry of the old contract and the start of the new. This gap might be several weeks in length and might give rise to the assumption that there is a break in continuity of employment. The decision of the EAT in the Welton case would tend to suggest that if the new employment contract was agreed at the start of that period of absence, then the whole of that period of absence will form part of the continuous employment; this will enable the employee to bridge the gap between the old employment and the new for the purposes of calculating the total period of his continuous employment.
The decision is not just of relevance in situations involving potential unfair dismissal; continuous employment can be relevant to eligibility for a variety of claims. Moreover, the total period of continuous employment is relevant for the calculations which can take place on redundancy and these figures can be particularly significant for senior employees.