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‘Continuous employment’ – key things to know
As employees move through their careers, the idea of continuous employment, especially when shifting to a new contract, can raise questions. In this blog, we’ll dive into continuous employment and answer the query: ‘What happens to continuous employment when moving to a new contract?
What is continuous employment?
As the name suggests, the term continuous employment refers to the length of time an employee has worked for their employer without a ‘break’. By break, we don’t mean that the employee hasn’t taken any time off, as we’ll see below, but rather that they have worked under a Contract of Employment for the same employer for an interrupted period of time.
It may be that the employee has worked for one employer continuously or, in certain cases, they may have accrued a period of continuous employment from work they have undertaken for a previous employer. For example, if the employee has transferred from one employer to another, and the two employers are associated in some way, the employee’s continuity of service will be maintained.
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What can break an employee’s continuous service employment?
Unless an exception applies, continuity will be broken when there is a one-week (Sunday to Sunday) break between two Contracts of Employments.
For example, if the employee leaves one place of employment on 20 December and begins a new contract with another employer on 1 January, continuous employment will be broken and they will start to build up continuous employment again with the new employer.
Obviously, there will be times during someone’s employment when they will be away from work for a period longer than a week. With this in mind, some events don’t break continuity of employment. These include:
- Periods of annual leave, sick leave, and maternity and paternity leave
- If an employee is absent from work as result of a ‘temporary cessation of work’, for example the workplace is not safe or has been destroyed by a fire
- When an employee is dismissed on the grounds of ill health (provided they are re-employed on a new contract within a 26-week period, their continuity of employment will remain intact).
This ensures employees retains certain employment rights when these things occur.
Why does continuous employment matter?
At present, there are two categories of employee rights.
The first category is rights which are applicable from day one of employment. This includes the right to maternity leave, working time rights and the right to the National Minimum Wage.
The second category is rights which come into play after the employee has completed a qualifying period. For instance, an employee must have:
- Two years’ continuous service in order to be eligible for statutory redundancy pay
- 26 weeks’ continuous service in order to gain the right to request flexible working
- Two years’ continuous service in order to make a claim for unfair dismissal (unless they are able to establish an automatically unfair or discriminatory reason for their dismissal, in which case there is no qualifying service period).
There may be also contractual benefits which an employer provides once employees have reached a specific length of service, including additional annual leave.
In this way, there are benefits to be had from building up continuous employment.
Continuous employment and zero hours contracts
The very nature of zero hours contracts means that there may be breaks in these workers’ employment contracts, which affects the rights they accrue over time and the way employers structure their assignments.
However, if there is an overarching “umbrella contract”, continuity of employment is maintained even when there are gaps between the contracts, therefore they will accrue service whether or not they are working.
How does continuous employment work when moving from an agency position?
One question that often crops up is whether, when an individual moves from a temporary contract to a permanent position, time spent as an agency worker counts as continuous service for employment rights purposes.
Unfortunately, the position is not clear cut and will ultimately come down to whether the agency worker was in fact an employee at that time.
Generally speaking, a Court or Tribunal will not find that there was an employment relationship rather than one of agency unless it is necessary to do so in order for the relationship to work. This will be very fact-specific and will be dependent on what the arrangements and documents in place are. Professional advice should be sought if you have this situation.
Are continuous employment rules subject to change?
In 2017, the Taylor review of modern working practices was published. In it, it was proposed that the period required to break continuous service should be increased from one week to one month.
This was because some casual employees often found it difficult to accrue enough continuity of service in order to gain valuable employment rights.
The government issued a policy paper off the back of this in December 2018, entitled the Good Work Plan. In it, they stated they would be taking that proposal forward, although to date the timescale for this is not known.
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