Welton v Deluxe Retail Ltd (t/a Madhouse)
Mr Welton worked at a store in Sheffield that closed down, and his employment was terminated on 23 February 2010. The working week ended on 27 February 2010. On 1 March, during what would have been his next working week, he agreed to accept employment with the same employer in Blackpool, with the first working day falling in the following week, on 8 March 2010. A few months later, his employment terminated. He brought a claim for unfair dismissal.
At a pre-hearing review, the employment judge had to determine whether or not Mr Welton had sufficient continuity of service to bring the unfair dismissal claim. If his employment in Blackpool was continuous with his employment in Sheffield, he had sufficient service to bring the claim; if his employment was interrupted, he did not have sufficient continuity of service. The judge found there was no continuity of employment.
Mr Welton appealed to the Employment Appeal Tribunal (EAT).
Three points arose:
- Is an agreement made in one week to start work the following week a contract of employment that, under part XIV of the Employments Right Act 1996, means that there is no break in continuity because a contract of employment is deemed to have been in place for the whole of the week of dismissal and the week of re-engagement?
- Alternatively, was there a temporary cessation of work to which s.212 of the Employment Right Act 1996 applied to preserve continuity?
- Finally, was the judge right to regard an “arrangement” in s.212(3) of the Employments Right Act 1996 (which preserves continuity during any period in which the employee is absent, but by arrangement or custom is regarded as continuing in employment) as one that cannot be made retrospectively? There was conflicting EAT authority on this point.
The EAT concluded:
- On the first issue, the EAT held that there was a contract of employment in place from 1 March, notwithstanding that work had yet to be performed under it.
- On the second issue, the EAT held that the absence was on account of a cessation of work, and could be regarded only as temporary.
- However, on the third issue, the employment judge was right that an arrangement could not be entered retrospectively so as to confer continuity, and London Probation Board v Kirkpatrick, which had decided the contrary, should no longer be followed by tribunals.
The appeal was allowed.
Any week in which there is a contract of employment governing the relationship will count towards the period of continuous employment, even if it was only for one of the days of that week. A week is defined as “a week ending with Saturday”.
If an employee terminates his or her employment on a Monday and recommences the following Tuesday, there has not been a gap of the requisite “week ending with Saturday” to break continuity. It is necessary to consider carefully whether or not there was any interval lasting from Sunday to Saturday that did not count towards continuous employment. A contract of employment can exist even where there is no performance.
In this case, the EAT held that an employee’s service under two contracts of employment with the same employer was continuous, even though he did not start work under the second contract until more than a week after the end of the first contract. The EAT found that the second contract of employment had been created when the employee accepted the job offer, which meant that there was not a week’s gap between the two contracts.
However, continuity of employment will begin only on the day on which the employee starts work, not the date on which he or she signs the contract. Section 212(1) of the Employment Rights Act 1996 applies only after continuity has begun: it does not affect or change the date on which continuity starts, but only determines what weeks count.
In the particular circumstances of this case, continuity of employment was preserved where a new contract was entered into within the same working week that the previous contract terminated, even where the employee did not commence working under the new contract until a later date.
Clare Gregory, partner, DLA Piper
Practical guidance from XpertHR on continuity of employment