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When do you start calculating length of service?

31st May 2013
It may seem obvious in many cases which date marks the commencement of service for calculating an employee's "continuity of employment". In most cases the employee will only start work for a particular employer on the first date designated in their contract of employment. However, in some cases this is not always so. For example, many teachers may start doing "preparation" work before the start of the new term when they will begin teaching at a new school. In some cases senior employees may be required to give a "handover" to their nominated successor before the official first date of employment for that successor.

The issue of ascertaining the true start of the employment is important, as certain rights accrue from that particular date. For example an employee has to have worked for an employer for two years before being protected against "ordinary" unfair dismissal. Likewise an employee has to have worked for two years before being entitled to a  statutory redundancy payment. So the issue can have an important impact on whether an employee has acquired certain legal rights or not.

A question that has arisen is whether continuity of employment starts from the date upon which the employee undertakes activities for the particular employer or, where later, the date upon which the employee's work under the contract of employment begins (ie the date specified in that contract). This is an issue that has been considered by the Employment Appeal Tribunal (the EAT) in the recent case of Koenig v The Mind Gym.

The EAT ruled that the date on which continuity really begins is the actual date on which the employee's work under the contract of employment begins (ie the latter date in the scenario outlined above). The EAT ruled that work outside a contract of employment (such as in a handover before the official commencement date) cannot count. However, in determining what work falls in or outside a contract of employment will be a matter of fact to determine in each case.

In the case in question the employee had been dismissed on the 29th September 2010. Her written contract of employment stated that she had started on the 1st October 2009, with the result that she had insufficient length of service (insufficient continuity of service) to be able to bring a claim of unfair dismissal. She brought an appeal to the EAT relying on the fact that she had attended a meeting with a client of the new employer on the 29th September 2009 which she said should have been regarded as work under her contract of employment. The EAT rejected her claim, holding that the Employment Tribunal had been entitled to reach the conclusion that she had not attended the meeting with the client in the capacity of employee, as she had not been paid to attend that meeting, and had gone there at her own choice.

The practical implication is that individuals need to look very carefully at the proposed start dates in any new contract of employment, and decide very carefully about offering help or assistance or any work to the new employer (however well intentioned) before the official start date under their contract.
If you have need advice on any of the issues raised in this article do not hesitate to contact us at Hallett Employment Law Services.
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