What is continuous employment?

A special set of statutory rules define what amounts to continuous employment, and employees with broken or irregular service with the same or an associated employer may still be able to show that they have the necessary continuity of employment to claim unfair dismissal (and other statutory rights).

Continuous employment is calculated under sections 210 to 219 of the ERA 96. An employee’s period of continuous employment begins on the day the employee starts work (section 211(1) ERA 96). This means the date the employees starts work under the contract of employment. It does not include “non-obligatory” and unremunerated activities such as attending a welcome lunch to meet colleagues before the work start date (Koenig v The Mind Gym Limited [2013] UKEAT/0201/12/KN).

Sections 210 to 219 of the ERA 96 identify a series of circumstances in which continuity of employment will not be broken by gaps in time that are not covered by a contract of employment. A gap of less than a week does not break continuity even if, within that week, the employee goes to work for another employer and then returns. It does not matter how many days within each week an employee works, as long as he works during every week.

In Vernon v Event Management Catering Ltd (UKEAT/0161/07/LA), a tribunal concluded that a casual worker had sufficient continuous employment to bring a claim for unfair dismissal, by analysing the gaps between each separate period of employment. This is another good reason why it pays to keep a clear record of days and hours worked.

Under section 210, employment will be presumed to be continuous unless the contrary is clearly shown.

Under section 212, the following circumstances do not break continuity of service:

• incapacity through sickness or injury of 26 weeks or less;

• a temporary cessation of work; or

• absence that by arrangement or custom is regarded as continuing the employment.

Whether or not there is a temporary cessation of work is a question of fact, looking at whether there was work before and after the gap, and asking whether the reason for the gap was because the employer had no work to offer the employee (Hussain v Acorn Independent College Limited UKEAT/0199/10). In particular, there is no rule that the new work after the gap must be in the same workplace (Welton v Deluxe Retail Limited t/a Madhouse (in Administration) (UKEAT/0266/12/ZT))

An employer and employee cannot agree between themselves that weeks will not count toward continuous service if they meet the statutory criteria under the ERA 96. This is because these laws are designed to protect employees and to guard against them being pressured to give away their rights by the employer:

Continuity of service can be preserved where there is an arrangement or custom under section 212 ERA 96:

In Unwin v Barclays Bank (EAT/0273/02), the EAT held that career break terms agreed between Mrs Unwin and Barclays amounted to an “arrangement” intended to continue the employment contract for the purposes of section 212. As a result, Mrs Unwin’s service preceding her career break was included when she resigned less than a year after returning to work and brought a claim for constructive dismissal. By contrast, in Curr v Marks & Spencer [2003] IRLR 74, another career break case, there was no evidence of an arrangement or custom preserving Ms Curr’s continuity over a career break and her claim failed. These cases demonstrate the importance of reaching clear agreements before starting any career break.

Employee and employer cannot agree after-the-event that a gap in employment was as a result of an arrangement. The arrangement must be in place before or contemporaneously with the gap in employment (Welton v Deluxe Retail Limited t/a Madhouse (in Administration) UKEAT/0266/12/ZT).

Below are some examples of the rules operating to preserve continuity:

• Any week during which the relationship is “governed by a contract of employment” (section 212(1) ERA 96), even if the employee has been offered a new contract of employment by the employer but has not yet started work under it (Sarkar v South Tees Acute Hospitals NHS Trust [1997] IRLR 328, followed in Welton v Deluxe Retail Limited t/a Madhouse (in administration) (UKEAT/0266/12/ZT);

• employment on a series of fixed-term contracts (Pfaffinger v City of Liverpool Community College [1996] IRLR 508): Note that, under the Fixed-Term Employee Regulations, an employee who has worked on a series of fixed-term contracts for four years or more will be deemed to be a permanent employee unless the employer can justify keeping them on a fixed-term contract (see Chapter 2: Temporary employees);

• dismissing and then reinstating an employee (Ingram v Foxon [1985] IRLR 5), even if there is a TUPE transfer between dismissal and reinstatement (G4S Justice Services (UK) Ltd v Anstey EAT/0898/5);

• a period of work abroad followed by one in the UK with the same employer (Weston v Viga Space Systems [1989] IRLR 429);

• A period of work as a temporary teacher covering for sickness absence up to the long Summer break, followed by a permanent contract the following September with the same employer (Hussain v Acorn Independent College Limited [2010] UKEAT/0199/10);

• a break for sickness of fewer than 26 weeks, even if the employee worked elsewhere in that period (Donnelly v Kelvin International Services [1992] IRLR 496);

• a two-week gap during which the employee continued to work for the old employer before being transferred to the new employer under the TUPE regulations (Tuck A & G v Bartlett [1994] IRLR 162); and

• a week during which the employee received unemployment benefit in the period between his employment shutting down and reopening (Justfern v D’Ingerthorpe [1994] IRLR 164).

If an employee is on strike for any part of a week, continuity is not broken. However, that week does not count in calculating continuous length of service. Women on maternity leave preserve their continuity of employment, and the period of the leave itself is counted.