Employment Rights Act 1996, section 218

Change of employer

Part XIV Interpretation

(1)Subject to the provisions of this section, this Chapter relates only to employment by the one employer.

(2)If a trade or business, or an undertaking (whether or not established by or under an Act), is transferred from one person to another—

(a)the period of employment of an employee in the trade or business or undertaking at the time of the transfer counts as a period of employment with the transferee, and

(b)the transfer does not break the continuity of the period of employment.

(3)If by or under an Act (whether public or local and whether passed before or after this Act) a contract of employment between any body corporate and an employee is modified and some other body corporate is substituted as the employer—

(a)the employee’s period of employment at the time when the modification takes effect counts as a period of employment with the second body corporate, and

(b)the change of employer does not break the continuity of the period of employment.

(4)If on the death of an employer the employee is taken into the employment of the personal representatives or trustees of the deceased—

(a)the employee’s period of employment at the time of the death counts as a period of employment with the employer’s personal representatives or trustees, and

(b)the death does not break the continuity of the period of employment.

(5)If there is a change in the partners, personal representatives or trustees who employ any person—

(a)the employee’s period of employment at the time of the change counts as a period of employment with the partners, personal representatives or trustees after the change, and

(b)the change does not break the continuity of the period of employment.

(6)If an employee of an employer is taken into the employment of another employer who, at the time when the employee enters the second employer’s employment, is an associated employer of the first employer—

(a)the employee’s period of employment at that time counts as a period of employment with the second employer, and

(b)the change of employer does not break the continuity of the period of employment.

(7)If an employee of the [F1076governing bodyF1076] of a school maintained by a [F1077local authorityF1077] is taken into the employment of the authority or an employee of a [F1077local authorityF1077] is taken into the employment of the [F1078governing bodyF1078] of a school maintained by the authority—

(a)his period of employment at the time of the change of employer counts as a period of employment with the second employer, and

(b)the change does not break the continuity of the period of employment.

(8)If a person employed in relevant employment by a health service employer is taken into relevant employment by another such employer, his period of employment at the time of the change of employer counts as a period of employment with the second employer and the change does not break the continuity of the period of employment.

(9)For the purposes of subsection (8) employment is relevant employment if it is employment of a description—

(a)in which persons are engaged while undergoing professional training which involves their being employed successively by a number of different health service employers, and

(b)which is specified in an order made by the Secretary of State.

(10)The following are health service employers for the purposes of subsections (8) and (9)—

[F1079 (za)[F1080 NHS EnglandF1080] ,

[F1081 (zb)an integrated care board established under section 14Z25 of the National Health Service Act 2006,F1081,F1079]]

F1082 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)Special Health Authorities established under [F1083section 28 of [F1084 the National Health Service Act 2006F1084] or section 22 of the National Health Service (Wales) Act 2006F1083] ,

F1085 ( bb ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)National Health Service trusts established under [[F1086,F1087 the National Health Service Act 2006F1087] or the National Health Service (Wales) Act 2006F1086] ,

[F1088 (ca)NHS foundation trusts, F1088]

[F1089 (cb)Local Health Boards established under section 11 of the National Health Service (Wales) Act 2006,F1089]

[F1090 (cc)the National Institute for Health and Care Excellence,F1090]

F1091 (cd). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F1092 (ce)the Health Services Safety Investigations Body.F1092]

(d)F1093. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(dd)F1094,F1095......

F1095 (e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F1096 (11) In subsection (7) “local authority” has the meaning given by section 579(1) of the Education Act 1996 . F1096]

Definitions used in section 218 7

employment

(5) In this Act “employment”—

(a)in relation to an employee, means (except for the purposes of section 171) employment under a contract of employment, and

(b)in relation to a worker, means employment under his contract;

Defined in s.230(5) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act
employer

(4) In this Act “employer”, in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.

Defined in s.230(4) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act
business

“business” includes a trade or profession and includes any activity carried on by a body of persons (whether corporate or unincorporated),

Defined in s.235(1) · see it in the full Act
employee

(1) In this Act “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.

Defined in s.230(1) · see it in the full Act
contract of employment

(2) In this Act “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.

Defined in s.230(2) · see it in the full Act
local authority

“local authority”, in relation to the placement of children under section 22C of the Children Act 1989 , has the same meaning as in that Act (see section 105(1) of that Act );

Defined in s.235(1) · see it in the full Act
employed

and “employed” shall be construed accordingly.

Defined in s.230(5) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act

Cases considering section 218 13

North Wales Training and Enterprise Council Limited (t/a Celtec) (Appellants) v. Astley and others (Respondents) (formerly Celtec Limited (Appellants) v. Astley and others (Respondents))

[2006] UKHL 29 · 21 June 2006Limits

The section governs continuity of employment following a change of employer and was the domestic basis for the respondents' claim that their civil service periods counted. (see paras [14]; [26]) The subsection provides the general rule that the continuity chapter ordinarily concerns employment by one employer. The transfer rule qualified that starting point. (see para [26]) Where a trade, business or undertaking is transferred, the employee's prior service counts with the transferee and the transfer does not break continuity. This consequence applied once the respondents' employment relationships were deemed transferred. (see paras [26]; [75])

Oakland v Wellswood (Yorkshire) Ltd

[2009] EWCA Civ 1094 · 30 July 2009Interprets

The Court construed section 218 as preserving continuity when a trade, business or undertaking transfers, independently of the unresolved TUPE issue (see paras [10]; [15]-[17]). Confirms that the continuous-employment chapter generally concerns employment by one employer, subject to the statutory change-of-employer provisions (see para [15]). Applies the change-of-employer rule so that employment with the transferor counts with the transferee and continuity is not broken. This gave Mr Oakland the required qualifying period (see paras [15]-[16]). Applies the rule that the employee’s period of employment in the transferred undertaking counts as employment with the transferee (see paras [15]-[16]). Applies the rule that a transfer does not break continuity of employment. The result was that prior service with Oldco counted towards the unfair-dismissal qualifying period (see paras [15]-[16]).

Bower v Stevens & Anor

[2004] EWCA Civ 496 · 6 April 2004Interprets

Confirms that the provision is capable of applying where partners dissolve their partnership and the business is carried on thereafter by one former partner. The court left the issue undecided in the present appeal because it was raised late and the evidence was incomplete (see paras [29]-[41]). Interprets the continuity provision as preserving employment continuity where two partners are succeeded by one of them as sole principal. “With the partners” includes employment with the former partner who remains, in that partner’s capacity within the organisation, trade or business (see paras [35]-[39]).

2 more judgments, and what each says about section 218, are in the case-law panel in the full Act.

Amendments and notes

27 notes from legislation.gov.uk

Amendments

  1. F1076Words in s. 218(7) substituted (1.10.2002 except in relation to W. and otherwise 19.12.2002) by Education Act 2002 (c. 32), s. 215(1), Sch. 21 para. 32 (with ss. 210(8), 214(4)); S.I. 2002/2439, art. 3; S.I. 2002/3185, art. 4, Sch. Pt. 1
  2. F1077Words in s. 218(7) substituted (5.5.2010) by The Local Education Authorities and Children's Services Authorities (Integration of Functions) Order 2010 (S.I. 2010/1158), art. 1, Sch. 2 para. 41(5)(a)
  3. F1078Words in s. 218(7) substituted (1.10.2002 except in relation to W. and otherwise 19.12.2002) by Education Act 2002 (c. 32), s. 215(1), Sch. 21 para. 32 (with ss. 210(8), 214(4)); S.I. 2002/2439, art. 3; S.I. 2002/3185, art. 4, Sch. Pt. 1
  4. F1079S. 218(10)(za)(zb) inserted (1.10.2012) by Health and Social Care Act 2012 (c. 7), s. 306(4), Sch. 5 para. 75(a); S.I. 2012/1831, art. 2(2)
  5. F1080Words in s. 218 substituted (1.7.2022) by Health and Care Act 2022 (c. 31), s. 186(6), Sch. 1 para. 1(1)(2); S.I. 2022/734, reg. 2(a), Sch. (with regs. 13, 29, 30)
  6. F1081S. 218(10)(zb) substituted (1.7.2022) by Health and Care Act 2022 (c. 31), s. 186(6), Sch. 4 para. 49; S.I. 2022/734, reg. 2(a), Sch. (with regs. 13, 29, 30)
  7. F1082S. 218(10)(a) omitted (1.4.2013) by virtue of Health and Social Care Act 2012 (c. 7), s. 306(4), Sch. 5 para. 75(b); S.I. 2013/160, art. 2(2) (with arts. 7-9)
  8. F1083Words in s. 218(10)(b) substituted (1.3.2007) by National Health Service (Consequential Provisions) Act 2006 (c. 43), ss. 2, 8(2), Sch. 1 para. 180(b) (with Sch. 3 Pt. 1)
  9. F1084Words in s. 218(10)(b) substituted (1.4.2013) by Health and Social Care Act 2012 (c. 7), s. 306(4), Sch. 5 para. 75(c); S.I. 2013/160, art. 2(2) (with arts. 7-9)
  10. F1085S. 218(10)(bb) omitted (1.4.2013) by virtue of Health and Social Care Act 2012 (c. 7), s. 306(4), Sch. 5 para. 75(d); S.I. 2013/160, art. 2(2) (with arts. 7-9)
  11. F1086Words in s. 218(10)(c) substituted (1.3.2007) by National Health Service (Consequential Provisions) Act 2006 (c. 43), ss. 2, 8(2), Sch. 1 para. 180(d) (with Sch. 3 Pt. 1)
  12. F1087Words in s. 218(10)(c) substituted (1.4.2013) by Health and Social Care Act 2012 (c. 7), s. 306(4), Sch. 5 para. 75(e); S.I. 2013/160, art. 2(2) (with arts. 7-9)
  13. F1088S. 218(10)(ca) inserted (1.4.2004 for E.W.) by Health and Social Care (Community Health and Standards) Act 2003 (c. 43), ss. 34, 199(1)(4), Sch. 4 para. 101; S.I. 2004/759, art. 2 (as amended by S.I. 2006/836 and S.I. 2007/1102)
  14. F1089S. 218(10)(cb) inserted (1.4.2007) by The References to Health Authorities Order 2007 (S.I. 2007/961), art. 3, Sch. para. 27(4)
  15. F1090S. 218(10)(cc) inserted (1.4.2013) by Health and Social Care Act 2012 (c. 7), s. 306(4), Sch. 17 para. 6(3); S.I. 2013/160, art. 2(2) (with arts. 7-9)
  16. F1091S. 218(10)(cd) omitted (1.2.2023) by virtue of The Health and Social Care Information Centre (Transfer of Functions, Abolition and Transitional Provisions) Regulations 2023 (S.I. 2023/98), reg. 1(2), Sch. para. 8(4) (with reg. 3)
  17. F1092S. 218(10)(ce) inserted (1.10.2023) by Health and Care Act 2022 (c. 31), s. 186(6), Sch. 15 para. 6(4); S.I. 2023/1035, reg. 2(c)
  18. F1093S. 218(10)(d) repealed (1.4.2006) by Health and Social Care (Community Health and Standards) Act 2003 (c. 43), ss. 196, 199(1)(4), Sch. 14 Pt. 4; S.I. 2005/2925, art. 11(2)(n)
  19. F1094S. 218(10)(dd) omitted (1.4.2013) by virtue of Health and Social Care Act 2012 (c. 7), s. 306(4), Sch. 7 para. 9; S.I. 2013/160, art. 2(2) (with arts. 7-9)
  20. F1095S. 218(10)(e) and the preceding word "and" repealed (1.4.2005 for E.W.) by Health and Social Care (Community Health and Standards) Act 2003 (c. 43), ss. 190. 196, 199(1)(4), Sch. 13 para. 8, {Sch. 14 Pt. 7}; S.I. 2005/457, art. 2(1)(b)
  21. F1096S. 218(11) inserted (5.5.2010) by The Local Education Authorities and Children's Services Authorities (Integration of Functions) Order 2010 (S.I. 2010/1158), art. 1, Sch. 2 para. 41(5)(b)

Modifications

  1. C213Ss. 210-219 applied (E.W.) (1.4.2020) by The Agricultural Wages (Wales) Order 2020 (S.I. 2020/347), arts. 1, 2(3)
  2. C214Ss. 210-219 applied (22.4.2022) by The Agricultural Wages (Wales) Order 2022 (S.I. 2022/417), arts. 1(2), 2(3)
  3. C215Ss. 210-219 applied (E.W.) (6.8.2022 with effect from 1.4.2022) by The Agricultural Wages (No. 2) (Wales) Order 2022 (S.I. 2022/794), arts. 1, 2(3)
  4. C216Ss. 210-219 applied (1.4.2023) by The Agricultural Wages (Wales) Order 2023 (S.I. 2023/260), arts. 1, 2(3)
  5. C217Ss. 210-219 applied (W.) (1.4.2024) by The Agricultural Wages (Wales) Order 2024 (S.I. 2024/390), arts. 1, 2(3)
  6. C219S. 218(7) extended (temp. from 1.4.1999 to 1.9.1999) by S.I. 1999/638, reg. 4