The question
We have workers employed on zero hours/casual contracts, which means that there is no obligation either to offer or accept work on either side. But one of these workers is moving to a take on a permanent role with us.
Do we give them continuity of service from their casual start date or from the time that they become permanently employed? As a casual worker, they were offered and accepted work during most weeks, with only few breaks.
Our terms of engagement are silent on this – can you advise us on the legal position and what the best course of action to take is?
The legal verdict
Esther Smith, a partner at Thomas Eggar
To accrue continuous employment, the worker must be an ‘employee’. To determine whether this is the case, the relationship between the two parties should be assessed, with a particular emphasis on the obligations of each to provide and carry out work.
This situation is known as ‘mutuality of obligations’ and is based on whether a worker is expected to carry out the assigned work personally and whether the employer has sufficient control over their actions.
In this instance, if you have provided work on a regular basis and the worker has always accepted this, it would suggest that there are mutual obligations in respect of providing and accepting work.
This scenario would indicate that your worker is an employee, although this point alone would not be decisive in determining mutuality of obligations as highlighted above.
Assuming that the worker is an employee, however, they would accrue continuous employment for any week that they work while under an employment contract.
If they work under one zero-hours contract, which I assume is the case, continuity will likely run from the date of that contract, even if breaks occurred.
There are instances when continuity would be broken – for example, if the employee went without working for a full week under any employment contract.
In this case, you could terminate their employment, wait for a week and then hire them on the new terms. But this is only really an option if the worker has not undertaken a year’s service as otherwise they could bring a claim for unfair dismissal.
If it is your understanding and intention that this worker is not an employee until they have entered into a permanent contract, you should confirm in the contract that their previous employment does not count, and act on that basis.
However, you should be mindful, particularly when it comes to statutory rights that have a qualifying period (such as unfair dismissal), that the employee may be able to argue that their continuous service dates back to the original zero-hours contract.
Esther Smith is a partner in Thomas Eggar‘s Employment Law Unit.
Adam Partington, a solicitor at Speechly Bircham
The term ‘continuous employment’ is used to describe the length of unbroken time that an ‘employee’ has worked.
The term ‘employee’ has a specific meaning in law, however, and not everyone who performs work for another is necessarily one. They may, for example, be classified as a ‘worker’ or as being ‘self-employed’.
Therefore, in order to determine when the individual in question’s continuous employment began, it would be necessary to establish whether they were an ‘employee’ during the earlier period in which they worked for you under the zero hours/casual contract.
Whether an individual is an ‘employee’ under a contract of employment depends on a number of factors that have been identified by case law. A relevant factor is the obligation on an employer to offer work and the obligation on an individual to accept it.
The information that you have provided suggests that such an obligation did not exist under the zero hours/casual contract arrangement. But this factor is not the only basis on which to determine whether an employment relationship exists.
There are also other relevant factors to consider such as whether the individual was required to provide their service personally (or whether they could send someone as a substitute), and the extent to which you controlled them, for example in the way that they did the work.
You would need to take legal advice based on fuller details in order to get a better idea of where you stand in this respect.
If the individual is an employee under the previous casual arrangement, you would need to consider when their period of continuous employment began – it may not have been at the start of the zero hours contract if there were sufficient breaks (although I note you say that they undertook work for you most weeks).
If the individual was not an employee under the previous casual arrangement, but they become one from the point at which you take them on permanently, broadly speaking, the period of continuous employment would begin the day on which the employee starts work under the permanent contract.
It is required by law that you provide them with a written statement of their terms of employment, which needs to include the date on which this employment began. This statement must be given to someone within two months of them commencing employment.
The date on which the period of continuous employment began is significant because it is used to determine whether certain rights have accrued. For example, a right to bring a claim for unfair dismissal normally requires one year’s continuous employment.
(Note, however, that from 6 April 2012, the qualifying service period will increase to two years, but this will only affect those who are employed on or after that date).
Adam Partington is a solicitor at Speechly Bircham LLP.
