Welton v Deluxe Retail Ltd (trading as Madhouse)

A contract accepted to start work at a future date is a contract of employment from the time it is made. A week in which the parties’ relations are governed by that contract counts towards continuity under section 212(1) of the Employment Rights Act 1996, even though work has not begun.

Where no governing contract exists, a cessation of work is assessed by reference to work personally available to the employee. The location of the work, the position of other employees and the reason for the cessation are immaterial. Whether the cessation was temporary is judged with hindsight, as a question of fact and degree.

An arrangement under section 212(3)(c) must exist before, or arise contemporaneously with, the relevant absence. London Probation Board v Kirkpatrick should no longer be followed.

The claimant worked for the respondent at its Sheffield store until that store closed. He was later offered work at the respondent’s Blackpool store, accepted it, and began working there on 8 March 2010. He resigned in December 2010 and claimed unfair dismissal, relying on continuity from his Sheffield employment.

At a preliminary hearing, the Employment Judge held that the Blackpool employment was a separate period and that the claimant lacked the qualifying service required by section 108 of the Employment Rights Act 1996. The claimant appealed, arguing that his relations with the respondent were governed by a contract of employment during the intervening week, alternatively that the absence resulted from a temporary cessation of work, or that a retrospective arrangement preserved continuity.

1. Appeal allowed. The claimant had sufficient continuous employment to bring an unfair-dismissal claim. The case was to be heard and determined by an Employment Tribunal on that footing.
2. A contract accepted during the week beginning 28 February 2010, under which work was to begin in the following week, was a contract of employment when made. Sections 230(2), 230(3) and 230(5) of the Employment Rights Act 1996 distinguish the contract from performance of work under it. Section 212(1) therefore counted the week in which the contract was made.
3. Alternatively, the absence fell within section 212(3)(b). A temporary cessation of work concerns work personally available to the employee, not the employer’s business generally or work available to others. It may result from closure of a particular workplace and may be followed by work under a fresh contract at another location. Whether it was temporary was a question of fact and degree, assessed with hindsight. On these facts the cessation could only be regarded as temporary.
4. Section 212(3)(c) did not assist the claimant. The words “is regarded as continuing” and “by arrangement or custom” refer to circumstances existing before or contemporaneously with the absence. A retrospective arrangement cannot bridge a gap during which no contract governed the parties’ relations.
5. Employment Tribunals should follow Murphy v A. Birrell and Sons Ltd, Morris v Walsh Western UK and Joseph Ltd v Heath, and should not follow London Probation Board v Kirkpatrick on retrospectivity.

• Employment Appeal Tribunal: Allowed the appeal on the contract-of-employment and temporary-cessation grounds, rejected the retrospective-arrangement ground, and directed that the claim proceed on the footing that the claimant had sufficient continuous employment.
• Employment Tribunal: Held that the claimant had two separate periods of employment and lacked the qualifying service required for an unfair-dismissal claim.