Continuity of employment
J Bunker v Mark Insulations Ltd,
EAT website, 15 November 2005
After working for the company for nearly 20 years, Bunker resigned as she was moving to Devon. During her notice period, the company offered her a new role setting up a south-west branch office. The new role began on 5 January. Between the expiry of her notice (19 December) and 5 January, she was not required to work, although she offered to keep an eye out for new premises. Bunker was not paid during this period, although she had use of a company car, fuel card and mobile phone. In January, she signed a new contract confirming that her continuity of employment began on 5 January 2004. Subsequently, Bunker brought a tribunal complaint for unfair dismissal. The tribunal could only hear her claim if she had a sufficient period of continuous employment (by including her employment before 5 January).
The tribunal found that there was a contract governing the two-week period between 20 December and 4 January, so Bunker’s continuity of employment was retained. Even if there had been no contract, there was an “arrangement” in accordance with section 212(3) of the Employment Rights Act 1996 (ERA) whereby an employee is regarded as continuing in employment.
The EAT said the tribunal was wrong to find there was a contract or an arrangement under the ERA. Bunker’s old contract had terminated on notice that had not been rescinded. There was no new contract as there was no necessary minimum mutuality of obligation between the parties and there was no expectation that Bunker would work or be paid. The EAT also held that the tribunal had failed to spell out what kind of arrangement was in force and how this fitted within the statutory test. The case was sent back to a new tribunal for rehearing.