Continuous employment is important for calculating when an employee will benefit from protection from unfair dismissal. This also has an impact on the calculation of the basic award for unfair dismissal cases and redundancy pay.
Usually a break of a week or more between contracts of employment would be sufficient to break continuity of employment, for example if an employee resigned from the business only to return a few weeks later. However, there are situations where an employee is absent from work but will still benefit from continuous employment.
There are three main circumstances where an employee’s contract has ended but their employment continues.
The first reason is absence due to illness or injury. This is the case even if they work for another employer (doing a different type of work). Employment will not continue if the absence is longer than 26 weeks.
The second reason which will not break continuity is a temporary cessation of work, preventing work being carried out by an employee, for example, due to a loss of a contract. The employee must also be unable to attend because of the lack of work, rather than not attend of their own volition. There is no definition of what is to be classed as “temporary” and this is decided on the individual facts of the case. We do know however that continuity will not be broken if the individual is on a series of fixed term contracts and had a shut down period each year (for example seasonal workers).
The third reason is where an employee is absent from work due to a working arrangement or custom. The arrangement or custom must exist at the commencement of the absence, for example, an arrangement that an employee will work alternate weeks. Where the arrangement or custom will continue during a break in employment, there is no maximum set period for which the employee can be away from work and still benefit from continuity of employment. The longer the absence or break however, the more difficult it would be to argue that continuity was preserved during a break in employment.
You should bear the above reasons in mind when considering whether employees are protected from unfair dismissal or when working out their statutory redundancy payments.