What is continuous employment?

Most unfair dismissal claims require at least two years’ continuous employment. In some circumstances, employees with broken or irregular service with the same or an associated employer may be able to show, despite the gaps, that they have enough continuous service to claim unfair dismissal (and other statutory rights that depend on service).

The rules on continuous employment are found in sections 210 to 219 of the ERA 96. An employee’s period of continuous employment begins on the day they start work under the employment contract (section 211(1) ERA 96).

Employment is presumed to be continuous unless the employer can clearly prove that service continuity has been broken (section 210 ERA 96).

Continuous employment is measured by qualifying weeks. Any week during the whole or part of which the relationship is governed by a contract of employment will count towards continuous employment (Sarkar v South Tees Acute Hospitals NHS Trust [1997] IRLR 328, Welton v Deluxe Retail Limited t/a Madhouse (in Administration) UKEAT/0266/12/ZT).

In addition, sections 210 to 219 of the ERA 96 set out 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 with no contract of employment 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 each week an employee works, as long as they work during every week. In Vernon v Event Management Catering Ltd UKEAT/0161/07/LA, a casual worker could establish enough continuous service for an unfair dismissal claim because he had worked at least one day each week. This is a potentially useful case for zero-hours contract workers who need to establish employment continuity. It pays to keep a good record of days and hours worked.

Under section 212, the following circumstances will 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.

Working out whether there is a temporary cessation of work is a question of fact. As long as the reason for the gap between employment contracts is that the employer temporarily has no work to offer (as opposed to some other reason, such as illness or misconduct) there is likely to be a temporary cessation of work, and employment continuity will be maintained (Hussain v Acorn Independent College Limited [2010] UKEAT 0199/10/0809). There is no rule that the new contract after the gap must involve work 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 particular weeks will not count toward continuous service. This is because these laws are designed to protect employees and to guard against them being pressured to give away their rights:

Continuity of service can be preserved where there is an arrangement or custom under section 212 ERA 96. Here are two contrasting examples, both invoIving career breaks:

In Unwin v Barclays Bank EAT/0273/02, the EAT held that career break terms agreed between Ms Unwin and Barclays amounted to an “arrangement” to continue the employment contract. As a result, service leading up to the career break was included to calculate her continuous service. This meant that she had enough service for a claim for constructive dismissal when she resigned less than a year after returning to work. By contrast, in Curr v Marks & Spencer [2003] IRLR 74, Ms Curr was on a career break from Marks & Spencer but this time, there was no evidence of an arrangement or custom preserving her continuity so her claim failed. These cases demonstrate the importance of reaching clear agreements before embarking on a career break.

Employee and employer cannot agree “after-the-event” that a gap in employment was as a result of an arrangement (Welton v Deluxe Retail Limited t/a Madhouse (in Administration) UKEAT/0266/12/ZT).

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

• employment on a series of fixed-term contracts (Pfaffinger v City of Liverpool Community College [1996] IRLR 508). 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 [2006] UKEAT 0698/05/3003);

• 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 temporary supply work as a teacher lasting up to the long summer break, followed by a permanent contract beginning 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.