Continuous employment or continuity of service is a concept that all employers need to understand. But what is continuous employment exactly?
What is continuous employment? By continuous service employment, we mean the length of time an employee has worked for their employer without a break.
It may be that the employee has worked for one employer or in certain cases, an employee may have accrued a period of employment from work they have undertaken for a previous employer. For example, the employee transfers from one employer to another and the two employers are associated employers; the employee’s continuity of service will be maintained.
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.
Events that do not break continuity 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, a workplace is not safe or has been destroyed by a fire
- when an employee is dismissed on the grounds of ill health but they are reemployed within a 26 week period.
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 in play after the employee have completed a qualifying period. For instance, an employee must have two years of continuous service in order to be eligible for statutory redundancy pay and an employee must have worked for 26 weeks’ continuous service in order to gain the right to request flexible working.
There may be also contractual benefits which an employer provides once an employee had reached a specific length of service, including additional annual leave.
How does it work in zero hours contracts?
The very nature of zero hours contracts means that there may be breaks in their contract, which affects the right they accrue over time and the way employers structure their assignments.
If you have separate contracts for each assignment, there are no contracts between assignments and an employee will only accrue service while they are working.
If you have an umbrella contract, continuity of employment is maintained even when they are gaps between the contracts, therefore they will accrue service whether or not they are working.
Are the rules subject to change?
In the Taylor Review published last summer, it was proposed that the period counted as a break in continuous service should be increased from one week to one month. In its official response in February 2018, the government announced that they are committed to extending it but they have launched a consultation to gauge what the length should be.
The government has also said that it will update current guidance on continuous service to enable employers to get to grips with their obligations.
To discuss this in more depth, get in touch with your Employment Law Adviser.