I was contacted this week by an employee who wanted advice on pursuing an unfair dismissal claim against her former employer. Although she’d worked for the employer for around three years overall, she’d left the employer after two years before returning about three months later. In her particular circumstances this break broke her continuity of service and meant she was unable to pursue an ordinary unfair dismissal claim. Not all breaks in service however break continuity. Read on for more information about the importance of continuous employment and what events break and do not break continuity.
What Is Continuous Employment?
Continuous employment is a term used to describe the length of unbroken time that an employee has worked. It can consist of the time that an employee has worked for a single employer or (in some cases) can include work done for a previous employer. The period of continuous employment generally begins when an employee’s contract starts and ends when it terminates, as long as it has not been broken in any of the ways outlined below.
Why Is Continuous Employment Important?
Employees may need a specified period of continuous employment in order to exercise key statutory rights. For example:
- Two years’ continuous employment are usually needed to bring a claim for unfair dismissal;
- Two years’ continuous employment are usually needed to be entitled to a statutory redundancy payment.
The period of continuous employment is also used to calculate an employee’s basic award for an unfair dismissal claim or a statutory redundancy payment.
What Events Break Continuity?
Continuity of employment will be broken in the following situations:
- If there is no contract of employment in place for a complete week and a week is defined as a week ending with a Saturday. There are exceptions to this rule (see below). Note also that there are plans to extend this so that a gap of four weeks is required to break continuity.
- Illegality. Only work under a legal employment contract counts towards continuous employment.
- Receipt of a statutory redundancy payment will sever continuity for the purposes of future redundancy pay entitlement.
What Events Do Not Break Continuity?
Illness Or Injury
If an employee is incapable of work due to illness or injury, continuity will generally be preserved.
Temporary Cessation Of Work
An employee’s absence from work on account of a ‘temporary cessation of work’ will contribute towards continuity. A cessation of work must be temporary and might be, for example, a short-term factory shut down. The employee must be away from work due to the cessation and not have left for another reason and be re-employed.
Arrangement Or Custom
If an employee is absent from work in circumstances that are by arrangement or custom, they are regarded as continuing in employment. An arrangement or custom cannot be made retrospectively, it must exist at the start of the absence. For example there may be an arrangement that an employee works alternate weeks. There is no statutory maximum period for which an employee can be away from work and still preserve continuity under an arrangement or custom. However the longer the absence, the more difficult it may be to infer that an arrangement or custom existed, without an explicit agreement.
Transfer Of A Business
Employees can maintain continuity of employment following the transfer of a business. Where the employees of the transferor become employees of the transferee, continuity is maintained.
If an employee stops work for one employer and is immediately employed by an associated employer (for example an employee transferring from one group company to another within the same corporate group) then continuity is preserved. The periods of employment with both the original employer and the associated employer will count towards the employment period. Ordinarily, there must not be a gap of a whole week or more between employment with associated employers.
Partners, Trustees And Personal Representatives
All of the partners in a partnership are deemed to be the employer. Although the employer changes when a partner leaves or joins the partnership, this does not break continuity of employment. The periods of employment with both the original and new partners count towards the employment period.
Death Of Employer
An employment contract is discharged when an employer dies. However, continuity of employment will remain if on the death of the employer the employee is taken into the employment of the personal representatives or trustees of the deceased, providing this occurs within eight weeks of the employer’s death.
Substitution of Employer By Statute
If the law substitutes one corporate employer with another, the periods of employment with both the original and new employer will both contribute towards the period of continuous employment.
Change Of NHS Employer
If a person is undergoing certain professional training which involves them being employed by a successive number of National Health Service employers, the change of employer does not break the continuity of the period of employment.
Local Education Authority (LEA) Schools
If an employee employed by the governing body of an LEA school becomes employed by the LEA itself (or vice versa) continuity will be maintained.
Re-Employment After Redundancy
Where an employee’s contract is renewed, or they are engaged under a new contract following an offer made before the end of their employment under the previous contract and this takes effect within four weeks of the termination of the old contract, continuity will not be broken. The period between the employee being dismissed and re-engaged will contribute towards continuous employment.
Re-Employment After Unfair Dismissal
A dismissed employee’s continuous employment is preserved in certain circumstances where they are reinstated or re-engaged by their employer or an associated employer as a result of a tribunal complaint or pursuant to ACAS conciliation. A dismissed employee’s continuous employment is also preserved where they are reinstated or re-engaged through making a relevant settlement agreement.
Working Outside Great Britain
Other than for redundancy purposes, a period of employment spent wholly or mainly outside Great Britain counts in calculating continuous employment in the same way as employment within Great Britain.
Maternity, Paternity, Adoption And Parental Leave
Time spent on maternity, paternity, adoption or parental leave contributes towards continuous employment.
Lincs Law Employment Solicitors Can Help You
The above is an overview. If you are an employee or employer seeking specific advice on continuity of employment please contact us for a free enquiry on 01522 440512 or via the web chat or contact form on our website at www.lincslaw.co.uk.
Specialist Employment Solicitor
Lincs Law Employment Solicitors