Two Week Gap Between Employments with Associated Employers: Continuity Not Broken

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Posted on 10 Oct 2012

An employee who was dismissed by his employer but employed by an associated employer a couple of weeks later in a completely different job had continuity of employment.  Continuity was preserved as there had been a temporary cessation of work which could bridge the gap between the two contracts. 

In Holt v EB Security Ltd, H was dismissed from his job with P when the pub he was working in was closed down.  Two weeks later he took up a different role with EB, an associated employer of P.  Had there been no gap in the employment, continuity would have been preserved by S218(6) Employment Rights Act 1996 which provides for continuity of employment where an employee is employed by associated employers.  However, the tribunal found that the two week gap in employment meant that continuity was broken.  Although gaps in employment do not break continuity where the absence is on account of a temporary cessation of work, the tribunal considered this did not apply here.  H's employment with P ended with the closure of the pub.  The cessation of work was not temporary because H's work at the pub never resumed.  Instead he secured employment with an associated employer in a different role.  The cessation in work was therefore permanent. 

The EAT disagreed and held that H had been absent on account of a temporary cessation of work and therefore had continuity of employment.  Looking back from the vantage point of his employment with EB, the cessation was temporary - it had lasted only two weeks.

The decision in this case is somewhat surprising. There did not appear to be any arrangement before the employee left that he would join the associated employer – and although this is not required it would have made the decision less surprising.  In addition, the employer and associated employer appeared to be involved in different businesses and the employee’s role with each employer was entirely different.  Employers in similar situations will need to be aware of the risk that employees employed by associated employers may have continuous service even where the second employer does not resume the previous employer’s operations.

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