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The statutory rules on service continuity
[ch 10: pages 352-354]Not all gaps in employment break service continuity. Sections 210 to 219, ERA 96 set out the statutory rules on continuity of service. These rules can sometimes be used to bridge gaps in continuity of service for the purpose of a claim.
The first place to start is section 210(5), ERA 96. This says that employment is presumed to be continuous unless the contrary is shown. In other words, it is up to the employer to prove that continuity has been broken.
Under section 212(1), ERA 96, if an employee works under a contract of employment for any part of a week (even just one hour), that week will count in their continuous service. For example:
A casual worker who worked two or three days a week every week for three years, except for two weeks when he took a holiday, had enough continuous service for an unfair dismissal claim. He had worked a part of every week, and his holiday was an “arrangement or custom” that did not break his service (see below), since it had been agreed with HR in advance.
Vernon v Event Management Catering Ltd [2007] UKEAT/0161/07
Section 212, ERA 96 sets out other gaps in employment that will not break service continuity. These are:
• 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.
“Continuous service” is a statutory concept. This means that an employer and employee cannot agree between themselves that particular weeks will not count toward continuous service if they meet the statutory criteria under the ERA. For example:
An employee agreed to resign breaking his continuity so that he could take advantage of a favourable early retirement package. He immediately returned to a new job with the same employer. But the EAT said that his continuity was not broken, because he could not sign away his statutory rights.
Carrington v Harwich Dock Co [1998] IRLR 567
Continuity of service can be preserved covering periods when there is no employment contract in place, if there is an “arrangement or custom” in place (section 212, ERA 96). Special care is needed in the context of career break or secondment schemes, as these cases show:
Ms Curr had worked for the same employer for 20 years when she took a career break. She returned to work at the end of it and worked for another five years before being made redundant. Curr had assumed that her redundancy pay would take account of all of her service, but the Court of Appeal ruled that it did not. There was no arrangement or custom by which she could have been regarded as an employee during her career break, and therefore her continuity was broken.
Curr v Marks & Spencer [2002] EWCA Civ 1852
By contrast, in Unwin v Barclays Bank EAT/0273/02, the EAT found evidence that Ms Unwin, who was on a career break from Barclays, had reached an “arrangement” with the bank before leaving for her break that her service would not be broken. This meant that her earlier service was included when she was made redundant a year after returning to work.
It is not possible for the parties to agree “after-the-event” that a gap in employment was due to an “arrangement” between them. Instead, the arrangement must be in place before the break in work (Welton v Deluxe Retail Limited t/a Madhouse (in administration) [2012] UKEAT/0266/12/ZT).
For as long as the contract of employment remains in place, no question of continuity being broken ever arises. For example, an employee who has been on long-term sick leave for many months, or even years, will have continuous service even if all sick pay rights have been exhausted, because the contract of employment remains in place until it is terminated.
Continuity is also preserved following a business transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) (see Chapter 12).
An employee who is reinstated or re-engaged following a dismissal, either through Acas conciliation, a Settlement Agreement or a successful tribunal claim, will have their continuity of service from their original start date (see below: Reinstatement).
Continuity of service is not broken by a strike but the weeks do not count in calculating continuous length of service.
Employees on maternity leave preserve their continuity of employment, and the leave period counts as continuous service. The same is true of all other forms of statutory leave such as adoption leave, paternity leave and shared parental leave.
Continuous employment — reform proposals
The government has accepted a recommendation by the Taylor review (see page 33, Chapter 2) and the Work and Pensions and Business and Industrial Strategy joint select committee to extend from one week to one month the relevant break in service for the qualifying period for continuous employment, and to clarify (and perhaps expand) the situations in which cessation of work can be justified. The aim is to make it easier for workers on a series of short-term, intermittent contracts to claim rights that require a period of continuous service. These include the right to contest an unfair dismissal, as well as access to many parental rights (see Chapter 9). There will be consultation on this proposal, which would require a change to the existing legislation.