In Welton v Deluxe Retail Limited (t/a Madhouse), the Employment Appeal Tribunal assessed the effect of dismissal and re-engagement on an employee’s continuity of employment.

Before they acquire certain employment rights, such as the right not to be unfairly dismissed, employees must have a minimum period of continuous service. Employment legislation provides that any week in which an employee’s relations with his or her employer are governed by a contract of employment counts towards continuous service. This is the case no matter how many hours the employee works in that week.

Mr Welton worked for Deluxe in Sheffield, until its store in the town closed. The week after the closure, he accepted an offer to work in Deluxe’s Blackpool store. He started working in Blackpool during the following week.

Mr Welton worked in the Blackpool store for 9 months, until his employment terminated and he raised an unfair dismissal claim. It was clear that he only met the service requirement for unfair dismissal (then 1 year) if his time in Sheffield counted towards his continuous service with Deluxe.

The Employment Tribunal held that Mr Welton was unable to bring an unfair dismissal claim. It decided that his continuous service was broken in the week after the Sheffield store closed. During this week, he did not perform any work for Deluxe, either in Sheffield or Blackpool.

Mr Welton’s appeal to the EAT was successful. The EAT noted that during this non-working week, Mr Welton accepted an offer to work in Deluxe’s Blackpool store, creating a contract of employment. For this reason, there was no complete week when Mr Welton was not governed by a contract of employment, and so his continuous service was not broken.

This case serves as a reminder that a contract of employment can arise on the acceptance of a job offer before an employee actually starts working. Employers should bear in mind that if employees are dismissed and swiftly re-engaged, an apparent gap in their continuity of employment may in fact be bridged.

Julie Keir

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