When is a break in continuity of employment not a break at all?

The concept of continuity of employment is an important one for both employers and employees.

To qualify for certain employment rights, employees need to accrue minimum periods of continuity of employment. For example, an employee needs two years’ continuous service to have the right to a redundancy payment and, for employees employed on or after 6th April 2012, the right to claim unfair dismissal. Length of service is also a factor in calculating statutory minimum notice periods and redundancy payments.

It is vital, therefore, for all parties to be clear on an individual employee’s period of continuous employment. Often this is straightforward, but as a recent Employment Appeal Tribunal case shows, working out those all important dates can sometimes be trickier than first thought.

In Welton v Deluxe Retail Ltd, Mr Welton worked at Deluxe’s Sheffield store from 5 January 2009 to 23 February 2010 when the store closed. During the week commencing 28 February 2010, he accepted an offer of employment to work at Deluxe’s Blackpool store and started in Blackpool on 8 March 2010. Mr Welton’s employment there terminated on 11 December 2010 and he brought unfair dismissal proceedings. At the time, the qualifying period for unfair dismissal was one year.

The general rule is that a gap of a week or more is enough to break continuity and therefore Deluxe argued that the 12 day break between Mr Welton leaving Sheffield and starting in Blackpool meant that he did not have enough continuity to bring the unfair dismissal claim.

The Employment Appeal Tribunal disagreed and held that when Mr Welton accepted the offer of the Blackpool job, a contract of employment began. Therefore as there was not a period of time when his relations with Deluxe were not governed by a contract of employment, Mr Welton’s continuity was not broken. The basis for the EAT’s decision is that there are several authorities both in case law and statute concluding that a contract of employment can exist without there being any work performed under it.

However, the facts in this case were quite specific and it is important to note that the case concerned two periods of employment with the same employer. It does not follow that all contracts of employment will start when an offer is accepted or that an employee will be successful if he or she tries a similar argument to link periods of employment with different employers. This area of the law is complex and it pays to take specific advice even when at first glance the answer may seem obvious.

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