What’s the answer? Does their previous employment count?

Annie Hayes

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What’s the answer? Does their previous employment count?

By Annie Hayes

Jane Dines gets legal guidance this week from Helen Badger, employment law expert at Browne Jacobson and Chris Syder, Partner & Head of Employment at the London office of Clarkslegal LLP on how to interpret ‘continuous’ employment.

The question:
We had to lay off several members of staff just before Christmas due to a downturn in work. Most of them had only been with us for a year and didn’t therefore qualify for statutory redundancy pay. Three have now been taken back on as more work has, fortunately turned up. My concern is whether this counts as continuous employment even though there has been (just under) a month’s break in employment. They have been issued with temporary contracts as we are not too sure yet how long they will be needed.

Jane Dines

The answers:
Helen Badger, employment law expert, Browne Jacobson

When calculating continuity of employment, legislation provides that any week during the whole or part of which the relations are governed by a contract of employment will count towards the calculation of the period of continuous employment. However, where an employee is absent from work for certain specified reasons, one of which is a temporary cessation of work, those weeks during which they are absent could count towards the period of continuity.

You suggest that most of the employees who were laid off prior to Christmas did not receive a redundancy payment as they had not been with you for long enough. If this applies to the three people you have re-engaged then this is unfortunate as any redundancy payment would break the continuity. Assuming that these three people did not receive a redundancy payment then the issue to consider is whether the period of absence was due to a “temporary cessation of work”.

From what you say, the absence seems to be purely on the ground that there was no work to do, rather than because of misconduct for example. There has also been a cessation of work for these employees to do, even if there wasn’t a cessation of work altogether. The central question therefore seems to be whether the absence of just under a month could be deemed as temporary. Unfortunately, the courts have steered away from laying down specific periods which will and will not be deemed temporary and it comes down to an assessment of the facts of each case. The sort of factors that a tribunal would take into account include: the nature of the employment; the length of prior and subsequent service; the duration of the break; what was said when the break occurred; what happened during the break; what was said on re-engagement. As such, it is difficult to advise on the likely outcome of such considerations at this point in time.

Given the uncertainty in this situation, if you may be required to lay these employees off in the short to medium term, you should err on the side of caution and terminate before two years has expired from the commencement of their first period of employment. This would avoid you having to make any redundancy payments.

Helen can be contacted at: hbadger@brownejacobson.com

Chris Syder, Partner & Head of Employment at the London office of Clarkslegal LLP

Apologies for answering the question with an immediate question but presumably when the staff were made redundant just before Christmas they received termination letters and were issued with P45’s rather than there being a mutual agreement that they will be re-employed a few weeks later?

The staff have now been employed on new temporary contracts and there was presumably no agreement when they were re-employed that their previous continuity of employment would be honoured. Your position has to be that there was no employment contract in place for the (just under) month’s break so there is no continuity of employment.

A critical question to consider is why there was no contract during the month in question. For instance, it has been held that the continuity of employment of a teacher whose contract finished at the end of every summer term but who was re-engaged in the autumn term was preserved during the summer vacation.

Further, a tribunal will want to know whether these employees have been employed intermittently over say a number of years, as a Tribunal should consider all the relevant circumstances and in particular consider the length of the period of absence in the context of the period of employment as a whole. The terms of the new temporary contracts will be closely examined.

Chris Syder, can be contacted at csyder@clarkslegal.com

HRZone highly recommends that any answers are taken as a starting point for guidance only.

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