Factual and Procedural Background
The appeal arises from a judgment by Employment Judge Slater at a Pre-Hearing Review in Manchester concerning the continuity of employment provisions under the Employment Rights Act 1996. The Appellant began working for the Respondent, Company A, at a store in The City on 5th January 2009. That store closed on 23rd February 2010, with the working week running Sunday to Saturday, ending Saturday 27th February 2010. The Appellant began work at another store operated by Company A in a different location on 8th March 2010 and resigned on 11th December 2010.
The jurisdiction of the Tribunal to hear the claim depended on whether the employment at the second store was continuous with that at the first. The Employment Judge found that no offer of employment was made before the closure of the first store, concluding that the employment periods were separate and not continuous, thus lacking the required one-year continuous employment for unfair dismissal claims.
Legal Issues Presented
- Whether the contract of employment at the second store was continuous with the first, thereby satisfying the statutory requirement for continuous employment under the Employment Rights Act 1996.
- Whether the Appellant’s absence from work was on account of a temporary cessation of work under section 212(3)(b) of the Employment Rights Act 1996, which would preserve continuity of employment.
- Whether an arrangement made after an absence can retrospectively preserve continuity of employment under section 212(3)(c) of the Employment Rights Act 1996.
Arguments of the Parties
Appellant's Arguments
- The Appellant contended that he was subject to a contract of employment during the first working week following the termination of his contract at the first store.
- He argued that, if not, his absence should be regarded as due to a temporary cessation of work, preserving continuity under the statute.
- Alternatively, he asserted that there was an arrangement, even if reached after the event, that his absence should not break continuity of employment.
The Respondent, Company A, did not appear in the appeal hearing.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Gunton v Richmond Upon Thames London Borough Council [1980] ICR 755 |
Distinction between contract of employment and factual employment; repudiatory breach does not automatically terminate contract. |
Supported the view that a contract of employment can exist without actual work being performed; relevant to whether contract existed before work started at second store. |
| Boyo v Lambeth London Borough Council [1994] ICR 727 |
Followed Gunton; considered the effect of repudiatory breach on contract of employment. |
Referenced to show continued acceptance of Gunton’s principle despite reservations. |
| Societ Generale London Branch v Geys [2011] EWCA Civ 307 |
Confirmed Gunton’s principle in Court of Appeal. |
Noted as pending Supreme Court decision; relevant to contract termination principles. |
| Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2011] UKSC 58 |
Considered whether repudiatory breach automatically terminates contract; left undecided. |
Referenced to show ongoing judicial uncertainty but general acceptance of distinction between contract and employment. |
| Hochster v de la Tour (1853) 2 Ellis and Blackburn 678 |
Contract to work starting at future date is a valid contract despite no performance yet. |
Supported view that contract of employment can exist before work commences. |
| Sarker v South Tees Hospitals NHS Trust [1997] ICR 673 |
Contract of employment exists when agreed, performance may start later; anticipatory breach possible. |
Endorsed that contract governs relations from inception, even before work starts. |
| Tullet Prebon plc v BGC [2011] EWCA Civ 131 |
Supported Sarker on contract of employment principles. |
Confirmed statutory and common law principles regarding contracts commencing before work. |
| Fitzgerald v Hall Russell and Co Ltd [1970] AC 984 |
Interpretation of "temporary cessation of work" as personal to the employee’s available work. |
Applied to reject view that cessation must relate to whole business; supported temporary cessation preserving continuity. |
| Monarch Electric Ltd v McIntyre [1968] N.I. 163 |
Contrasting interpretation of temporary cessation of work focusing on employer’s business and place of work. |
Rejected by the court as irrelevant to personal availability of work for continuity calculation. |
| Ford v Warwickshire County Council [1983] ICR 273 |
Temporary cessation assessed with hindsight over the relevant period of employment. |
Supported approach that temporary cessation must be judged retrospectively. |
| Wood v York City Council [1978] ICR 840 |
Changing job or location with same employer does not break continuity of employment. |
Applied to support continuity despite store closure and re-engagement at different location. |
| Murphy v A. Birrell and Sons Ltd [1978] IRLR 458 |
Arrangement to preserve continuity must exist before or at time of absence; retrospective arrangements disallowed. |
Considered but ultimately rejected in favor of later authority allowing retrospective arrangements. |
| Ingram v Foxon [1984] ICR 685 |
Allowed retrospective arrangements preserving continuity where employer reinstated employee. |
Supported retrospective arrangements; favored over Murphy. |
| Morris v Walsh Western UK [1997] IRLR 562 |
Followed Murphy; arrangement must be in place at time of absence. |
Considered but contrasted with later decisions allowing retrospective arrangements. |
| Joseph Ltd v Heath EAT 881/97 |
Agreed with Morris and Murphy that arrangement must pre-date absence. |
Referenced in discussion of statutory construction of arrangements preserving continuity. |
| London Probation Board v Kirkpatrick [2005] IRLR 443 |
Allowed retrospective arrangement preserving continuity; rejected Murphy and Morris. |
Preferred by the Appellant; rejected by the court in this case as not consistent with statutory construction. |
| Roberts v West Coast Trains Ltd [2004] EWCA Civ 900 |
Example of reinstatement removing dismissal effect; relevant to continuity and abuse of process. |
Referenced to illustrate practical implications of arrangements and continuity. |
Court's Reasoning and Analysis
The court began by addressing whether a contract of employment existed during the week following the closure of the first store. It concluded that a contract was made during that week, governing relations between the Appellant and Company A, even though work had not yet commenced. This interpretation aligns with statutory definitions and case law distinguishing between the contract of employment and actual performance of work.
Applying section 212(1) of the Employment Rights Act 1996, the court held that the week in which the contract was made counts towards continuous employment, meaning there was no week entirely free of a contract governing the employment relationship. This contradicted the Employment Judge's implicit finding that no contract existed during that week.
Next, the court considered whether the Appellant’s absence was due to a temporary cessation of work under section 212(3)(b). The Employment Judge had limited "cessation of work" to temporary stoppages at the same workplace, excluding closure and re-opening elsewhere. The court rejected this narrow interpretation, relying on the House of Lords decision in Fitzgerald v Hall Russell, which held that the test is personal to the employee’s availability of work, not the employer’s overall business or location.
Viewed retrospectively, the absence was temporary because the Appellant was dismissed due to lack of work at the first store, not for other reasons such as misconduct. The court held that the closure of the first store constituted a temporary cessation of work for the Appellant, preserving continuity.
Finally, the court examined whether an arrangement for continuity could be made retrospectively under section 212(3)(c). It reviewed conflicting authorities, including Murphy v A. Birrell (disallowing retrospective arrangements) and London Probation Board v Kirkpatrick (allowing them). The court favored the former line of authority, reasoning that the statutory wording suggests arrangements or customs must exist at or before the period of absence to preserve continuity.
The court concluded that the Employment Judge erred in her approach to the contract existence and temporary cessation issues, but the appeal failed on the retrospective arrangement ground. The case must proceed on the basis that the Appellant has sufficient continuous employment to bring the claim.
Holding and Implications
The court ALLOWED the appeal on the grounds that the Appellant had sufficient continuous employment, either because a contract of employment existed during the week following the first store’s closure or because the absence was due to a temporary cessation of work, preserving continuity under the Employment Rights Act 1996.
The appeal was dismissed on the issue of retrospective arrangements preserving continuity, affirming that such arrangements must exist at or before the absence period.
The direct effect is that the Appellant has the requisite continuous employment to pursue an unfair dismissal claim before the Employment Tribunal. No new legal precedent was established beyond clarifying the application of existing statutory provisions and case law. Given that the Respondent is in liquidation, the court suggested early financial resolution discussions between the parties.