In the case of Holt v EB Security Ltd, the Employment Appeal Tribunal ("EAT") in a surprising decision has confirmed that continuity of employment is preserved when an employee is absent from work at one employer due to a temporary cessation of work, and then starts different work for an associated employer.  When the Claimant was then dismissed by the associated employer, he had the requisite length of service entitling him to claim unfair dismissal in the Employment Tribunal.

H was employed to work in a public house by a company called Prosec International Limited ("Prosec").  When the pub closed down, H was dismissed by Prosec.  Following a period of 14 days, H was then taken on by the Respondent, an associated employer of Prosec, in an entirely different role from what he did for Prosec.  H was dismissed by the Respondent less than one year later, and in order to be able to bring a claim for unfair dismissal, had to establish that his period of employment with Prosec should be counted when determining his period of continuous employment.

A break in employment will not break continuity of employment if the break is due to a "temporary cessation of work".  In order for there to have been a temporary cessation of work, the primary reason the employee ceased work must be because there was no work for them to do, and the cessation must be temporary.  There is no statutory definition of "temporary" however it is generally construed as meaning a short time in relation to the period of employment. 

The EAT considered that H ceased work for Prosec as there was no work for him to do, and that 14 days was a short enough period to be considered temporary.  The EAT further concluded that, as there is no need for the associated employer to resume the operations of the first employer, any work with an associated employer would suffice to preserve continuity.  Continuity was therefore preserved in this case and H’s claim for unfair dismissal could be heard by the Tribunal.

Impact for employers

  • This case serves as a reminder that any period of employment with an associated employer (e.g. a group company) is likely to count for the purpose of calculating continuous service, and this may be the case even if there is a gap in employment.
  • Since 6 April 2012, newly recruited employees will have to accrue two years’ continuous service, rather than one year, before they are entitled to bring a claim for unfair dismissal.