Hi everyone,
I'm after a little guidance regarding continuous service, specifically a break in continuity.
My question is, would a permanent employee need a 4 week break in continuity if they resigned from their current position but during their notice period, they were offered an immediate start for a permanent role in another area of the business? Basically does the break only apply to temp or zero hour contracts moving onto permanent contracts, or does it apply to all employees regardless. I can’t find specific wording anywhere to support that it applies to all contracts. Also is it officially 4 weeks yet or still 1 week?
A little background - We have an employee, on a permanent contract with over 2 years service, hand in their resignation. They are currently working their notice period (taking half as annual leave), therefore still an employee. A manager from another department has had a conversation with this employee and has offered them a role that they are advertising with an immediate start. They have agreed that the employee will start after they have taken their annual leave which is 2 weeks. I believe, as best practice, the resignation can be retracted and a straightforward transfer from one area of the business to another should happen with the employee keeping their length of service. Wouldn’t accepting an offer make supersede his resignation?
However, the counter argument I've been presented with is that because the employee has resigned, they would need to be processed as a leaver on the system and reinstated as a new starter. This would mean they lose their continuous service and due to a clause in the training agreement that they signed, they would need to pay back a percentage of the costs to the business. From what I'm aware of, the break between periods of employment which breaks continuity is four weeks, so not only is the employee working the 2 weeks left in their notice period, but they will need to wait an additional 4 weeks before starting their new role.
The issues I have are;
- The employee doesn’t have any warnings etc. on file or had any disciplinary action.
- I have been explicitly advised that I cannot offer advice to the employee or the manager in terms of retracting the resignation which I believe isn’t right as it’s pretty much common knowledge
- The manager would essentially need to wait 6 weeks for a current employee to work notice, have a break in service and then start their new position
Thanks in advance, it's a bit of a lengthy one!
Replies
Hi Suki
The 4 weeks will apply to all employees not just temp or zero hours contracts. However, I don't think that the 4 weeks has been enacted yet. I have checked the employment Rights Act and it still refers to 'a week'. (see ERA1996 S210 (4)Subject to sections 215 to 217, a week which does not count in computing the length of a period of continuous employment breaks continuity of employment). The increase to 4 weeks for a period that would break continuity is a recommendation in the Taylor Review Good Work Plan - some of the recommendations have been implemented but some are still 'planned'.
Either way (whether 4 weeks or 1 week) it may be that in the case that you describe, continuity will only be 'paused' and not 'broken' due to the fact that the employee was offered a new role before the old role ended. Therefore the employee is 'under contract' even though the new contract has not yet started. The period in between is likely to be regarded as a 'temporary cessation of work' (see Welton v Deluxe Retail Ltd (t/a Madhouse) UKEAT/0266/12)
There is no law that states this employee would need to be processed as a leaver, this is a system issue that can be overcome. I would recommend that you go back to the person that has raised the counter argument and explain that even if you insist on a 4 week 'break in service' it is likley (if tested) that the judge would rule continuity is not in fact broken and therefore qualifying service for certain protection/benefits should be preserved. It will be a matter of interpretation of the facts but definitely not a clear cut case.
Theresa