Simple Revision Notes: Continuity PDF

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Simple Revision Notes: Continuity...

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2P30 Revision Note - Continuity What is continuous employment? The term continuous employment is used to describe the length of unbroken time that an employee has worked. It can consist of the time that an employee worked for a single employer or (in some cases) can include work done for a previous employer. The period of continuous employment generally commences when an employee's contract starts (even if the employee is not at work that day) and ends when it terminates, as long as it has not been broken in any of the ways outlined below. Determining the period of continuous employment is largely governed by the ERA 1996. Importance of continuous employment Employees need to work for a certain length of time in order to gain key statutory rights. For example, an employee generally needs to have worked for at least two years in order to bring a claim for unfair dismissal. The period of two years is calculated from the date that the employee started work and ends on the effective date of termination (EDT). The most common exception is if the dismissal is automatically unfair because in that case a qualifying period is hardly ever required. In addition, generally only employees with at least two years' continuous employment are entitled to a statutory redundancy payment if they are dismissed by reason of redundancy. The employee's period of continuous employment is also used to calculate certain monetary awards. It is one of the figures used to calculate an employee's basic award, (one of the two elements of compensation payable to an employee who has been unfairly dismissed) and an employee's statutory redundancy payment. Specifically, the amounts of these payments depend on age and length of service, as this determines the number of weeks' pay due. Can parties contract into, or out of, continuity of employment? Continuity of employment is governed by statute, not contract. Accordingly, an employer and employee cannot decide that the period of continuous employment has ended if statute states otherwise. Any such agreement can only establish private contractual rights (Morris v Walsh Western). Determining the period of continuous employment under ERA 1996 Continuous employment is governed by statute, not contract, and so the length of the period is not necessarily the same as the period during which someone works under an employment contract. To help employees ascertain their length of continuous employment, they should receive "a written statement of particulars of employment" within two months of their start date (S1 ERA). It should include "the date when the employment began, and the date on which the employee's period of continuous employment began (taking into account any employment with a previous employer which counts towards that period)".

1.

The start of the period

An individual's continuous employment period "begins with the day on which the employee starts work" - Salvation Army v Dewsbury - EAT held that the reference to the day on which the employee starts work "is intended to refer to the beginning of the employee's employment under the relevant contract of employment. ... it is not intended to be interpreted literally as referring to when the employee first undertook the duties of the employment." In this case, this meant that a teacher started work on 1 May 1982 when she came under contract, although she did not actually start teaching until 4 May. 2.

The end of the period

Where an employee claims unfair dismissal, the period of employment terminates on the EDT. This is normally the last day of employment (section 97(2) and (4), ERA 1996). However, if the employer has not given its employee the correct period of statutory notice, the EDT will be the date on which the appropriate statutory minimum notice period would have ended (section 97(2) ERA 1996). What will break continuity? An employee's continuous employment will be broken if the employee takes a break of a complete week (7 clear days) ending with a Saturday. Events that do not break continuity There are a number of situations in which continuity of employment will not be broken even though there has been a complete week in which there is no employment contract. Some of these arise by virtue of statute, and some have developed as a result of case law. A) Statutory provisions relating to breaks in the employment contract Under S212(3) ERA, there are three sets of circumstances where the employee is between contracts of employment but continuity of employment is maintained: the employee's illness or injury, a temporary cessation of work or an arrangement or custom to regard employment as continuing. 1.

Illness or injury

Any weeks during which employees are genuinely incapable of doing the work for which they are employed due to illness or injury will contribute towards continuity (section 212(3)(a), ERA 1996). This provision rarely applies, as it is more common for employees to remain employed until they are no longer ill. 2.

Temporary cessation of work

Time during which an employee is "absent from work on account of a temporary cessation of work" will also contribute towards continuity (section

212(3)(b), ERA 1996). For example, in Cornwall CC v Prater, a home tutor worked on a series of temporary assignments under several employment contracts. The intervals between each assignment did not break her continuity because these intervals were due to a temporary cessation of work. 3.

Arrangement or custom

Any week that an employee is "absent from work in circumstances such that, by arrangement or custom, he is regarded as continuing in employment" will also contribute towards continuity S212(3)(c) ERA 1996. This issue is a question of fact for a tribunal to decide, and may be difficult to establish, as shown by Curr v M&S PLC. Mrs Curr started working for M&S in 1973, but took a career break under the company scheme between 1990 and 1994. She was made redundant in 1999 and her redundancy pay was calculated on the basis that she was only employed between 1994 and 1999. The Court of Appeal held that, on the facts, there was no arrangement that her employment had continued during her absence as both employer and employee must consider that the employee is continuing in employment. B) Statutory provisions relating to change of employer There are 2 main scenarios in which an employee might become employed by a different employer but maintain continuity: 1.

Transfer of a business

TUPE Regs 2006 operate when there is a transfer of an undertaking, business or part of an undertaking or business, where there is a transfer of an economic entity which retains its identity. An "economic entity" means "an organised grouping of resources which has the objective of pursuing an economic activity" (regulation 3(2), TUPE). TUPE also applies to certain service provisions changes (regulation 3(1)(b), TUPE). In these circumstances, the terms and conditions of employment contracts and other employee rights are generally maintained. Continuity of service is also maintained. 2.

Associated employers

If an employee stops work for one employer and is immediately employed by an associated employer (as defined in S231 ERA 1996) continuity is preserved. The periods of employment with both the original employer and the associated employer will count towards the employment period. C) Case law preserving continuity Successive contracts: Employees can have several contracts with their employer, for example where they are employed under successive fixed-term contracts. Continuity will only be broken if the employee takes a break

between contracts of a complete week ending with a Saturday, unless that break constitutes a circumstance in which continuity is maintained by S212. For example, where a Trainee Solicitor is taken on after qualifying on a permanent contract there will be no break in continuity. Working alternate weeks: In a similar way, where an individual is employed during alternate weeks and does not work between those weeks, the entire period will count towards continuous employment provided the employment contract governs the entire period (including the intervening weeks). Umbrella contracts: An umbrella contract can exist where there are a series of short-term contracts with gaps between, but an over-arching contract can be implied by the conduct of the parties. If this is the case, a contract regulates the relationship and includes the periods when the employee was between assignments (see Carmichael, Nethermere etc). The period of continuous employment will therefore not be broken during the time that the employee is between assignments, because there is no break in the contract of employment. For this to occur there must be mutuality of obligation between the parties during the gaps and the periods of work....