Welton v Deluxe Retail (t/a Madhouse) is a case concerning continuity of employment for the purposes of calculating qualifying service for statutory employment rights. Under these provisions, any week when the employee’s relations with his or her employer are “governed by a contract of employment” will count towards continuous employment.
The case came about after Mr Welton was dismissed by Deluxe on 23 February 2010 – a Tuesday – when they closed their Sheffield shop down. The working week ran from Sunday to Saturday and therefore ended on Saturday 27 February 2010. At some point in the next working week, he was offered, and accepted, a job at another of Deluxe’s shops, in Blackpool. He started work on 8 March, i.e. more than a week after the previous working week ended.
Mr Welton resigned from his employment by letter dated 11 December 2010. Consequently, if employment at both stores was treated as continuous then he had sufficient service in order bring his claim. However, if the employment at the Blackpool store did not count as continuing from his employment at the Sheffield store then he did not. It was found at a preliminary hearing that he was not offered employment before the Sheffield store closed and the earliest date on which an offer to employ him in Blackpool was made was on 1 March.
The question was – did his contract begin when he actually started work, in which case there was a one-week break in continuity, or did it start at the earlier date when he accepted the offer? Mr Welton (representing himself in The Employment Appeal Tribunal) put up three arguments:
- 1. that he should be seen as being subject to a contract of employment during the first working week after the termination of his employment at Sheffield;
- 2. that, if not, his absence was due to a "temporary cessation of work" and, therefore, not a termination of employment; or
- 3. if not, there was an arrangement, albeit after the event, that his absence should not break contunuity of employment.
On the first point the EAT found that there was no week during the whole of which his relations with his employer were not governed by a contract of employment. Accordingly, there was continuity of employment. Although this was sufficient for Mr Welton, the EAT went on to consider the other two issues, i.e. was there a temporary cessation of work and/or an agreement to preserve continuity? The employment judge at the initial hearing took the view that " cessation of work" was limited to work performed in the same place after cessation as it was before. The EAT disagreed "…the computation of the Claimant’s period of employment could not fairly be affected by the question whether the employer was closing down a business or some department of it, as the employer here did at Sheffield". Rather, it is a pure question of fact, unaffected by the reason for it and the position of other employees. Mr Welton would therfor ave succeeded on this ground as well.
As for the possibility of a retrospective "arrangement" the EAT noted a conflict of authorities in existing EAT judgments concerning whether an arrangement can be made after the absence has concluded. After detailed analysis of the authorities Mr Justice Langstaff (the President of the EAT) concluded that "arrangements" (as referred to in s.212(3) of the Employment Rights Act 1996 do not operate to bridge the gap for continuity of employment unless they exist before or at the same time as the weeks of absence during which there is no contract of employment governing relations.
It is by no menas unusual for employees to be re-employed after a short gap which many employers would assume to operate as breaking contunuity of employment for the purpose of employment protection. This detailed judgment provides helpful guidance by highlighting potential pitfalls in this approach and is recommended reading for those who encounter any such circumstances