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employment start date

3 December 2012

When does an employees employment start?

Straightforward? You might think so. But a recent Employment Appeal Tribunal (EAT) decision has cast some confusion and, if correct, could have wide-reaching consequences whenever there is a delay between an offer of employment being made and an employee starting work.

Welton -v- Deluxe Retail Ltd T/A Madhouse (in administration)

The facts

Mr Welton worked at a store in Sheffield which was closed and his employment was terminated. In what would have been the next working week, he accepted an offer of employment with the same employer but based in Blackpool. The following week, he started work and, a few months later, he was dismissed. He argued that his employment in Sheffield should be treated as continuous with his employment in Blackpool. The employment tribunal disagreed.

The EAT decision

The EAT held that there was continuity of service. At the point an offer of employment had been made and accepted, there was in place a contract of employment (rather than a contract for employment). The EAT held that, although work was not required under that contract until the following week, the contract still governed the relations between Mr Welton and Deluxe from its inception; and since any week during any part of which relations between employer and employee are governed by a contract of employment counts towards continuous employment, continuity was preserved.

Implications

Although the facts in Welton are unusual, if the decision is correct, the principles could apply to any offer of employment which is accepted before a start date. This would have the effect of allowing an individual to accrue service for statutory purposes (such as the length of service required to bring an unfair dismissal claim or to qualify for redundancy pay) before they had carried out any work for the employer, and often whilst they remain employed elsewhere.

But is the decision correct?

In its judgment, the EAT said the contract governed relations between Mr Welton and Deluxe, did it in fact do so before he started work? The employer had no rights to exercise direction and control during that time; the employee was under no obligation to provide services and no restriction to carry out work for anyone else. Surely the period before work starts is analogous to the period after employment terminates - an employee may still be subject to certain contractual provisions (restrictive covenants as an example) but this doesnt mean the employment relationship continues.

Further, the EATs judgment did not mention the wording in s211 of the Employment Rights Act 1996, which specifically provides that an employees period of continuous service begins with the day on which the employee starts work and not the day upon which an employment contract is entered into.

Temporary cessation of work

The EAT also held that there was a second ground on which Mr Weltons appeal could be upheld: that the break between the contracts was due to a temporary cessation of work. Breaks due to a temporary cessation of work do not break continuity of service.

Again, is this decision correct? There was a permanent cessation of work at the store where the claimant worked; this was not a case where the employee stopped and then restarted. He stopped working on one job permanently but then a different job became available. If the decision stands, then any time an employer takes back an employee who was previously made redundant, there is a risk of continuous employment - the issue will then turn on whether the break is short enough to be regarded as temporary.

Final thoughts

Whilst the EATs decision was in the employees favour in this case, the risk of employment being regarded as continuous may deter some employers from offering jobs to people they have previously made redundant.

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