Employees can only bring a claim for ordinary unfair dismissal if they have the necessary period of continuous employment at the time of termination. But there are a variety of statutory exceptions to this rule: some gaps in employment do not affect continuity and continuity is preserved in certain cases where there is a change of employer. A considerable body of case law has developed around these exceptions - 18 cases were referred to in Welton v Deluxe Retail Ltd t/a Madhouse (In Administration)! These rules may well become more significant now that employees who started work on or after 6 April this year need two years' continuous service to bring a claim.
The claimant in Welton worked at a store in Sheffield, which closed down, and his employment was terminated as a result. During what would have been the next working week, he agreed to accept employment with the same employer in Blackpool, with his first working day there falling in the following week. After he was dismissed a few months later he needed to be able to add the Sheffield and Blackpool periods together to make an unfair dismissal claim, but the Employment Tribunal found that there was no continuity of employment.
In the EAT the claimant put forward three alternative arguments for continuity:
- he already had a contract of employment for the Blackpool job during the first working week after the termination of his contract at Sheffield (so there was no gap); or
- his absence from work was on account of a "temporary cessation of work"; or
- there was an "arrangement or custom" that the week's absence would not break continuity.
The first argument was successful. A contract of employment for the Blackpool job had been made when the claimant accepted the offer during the gap week, notwithstanding that no actual work was required until the next week. That was enough for the week's break to be counted and for the claimant to be allowed to bring his claim. But the EAT considered the other two arguments as well and concluded that the week's absence was also a temporary cessation, given the length of the gap as compared to the periods of service before and after it. (The potential breadth of this exception was illustrated in a case we mentioned a couple of months ago, Holt v EB Security, where an employee was able to add together two periods of pub employment separated by a two week gap, even though the second job was entirely different from the first.)
However, the "arrangement or custom" argument could not succeed because the offer of employment at Blackpool was not made until after the employment in Sheffield had ended - an arrangement cannot be entered into retrospectively so as to confer continuity.