First published: November 22nd 2021
Last Updated: October 21st 2022
What is continuous employment?
Continuous employment refers to an unbroken period of working for the same employer.
There are however certain breaks in service that will not interrupt continuity of employment. These include time out of service due to strikes, lock-outs and sometimes in unfair dismissal scenarios where the employee is reinstated or re-engaged into the service.
Continuous service will also be reinstated if an employee is dismissed wholly or in part to avoid the employee accruing qualifying service and the employee is re-employed within 26 weeks of employment.
Caselaw
The courts have handed down a number of decisions in this area of employment law.
In Kenry -v- Tegral Building Products Limited, the employee commenced his apprenticeship in 2000 and was made redundant upon completing his indentures in 2003. He was issued his P45 but 3.5 weeks later the employee was re-employed on a series of fixed-term contracts. His employment ended in April 2004.
The EAT held that “the continuous service of an employee in his employment shall not be broken by the dismissal of the employee by his employer followed by the immediate re-employment of the employee”.
What about resignation?
In general, resignation will instantly constitute a break in service even if the employee is re-employed shortly thereafter. Caution needs to be taken in the case of ‘heat of the moment’ resignations.
If the employee retracts their resignation shortly after an impulsive decision to resign, this will not be deemed a resignation for continuous service purposes.
There is also an onus on the employer to follow up and request for the employee to reconsider in these circumstances.
Unfair dismissal
An employee must have one-year qualifying service at the date of termination in order to claim unfair dismissal. An employee’s period of continuous service will also be used to calculate employee entitlements such as redundancy.
In Flannery v Mount Carmel Medical Group, the employee resigned in October 1991 as she wanted a career break, she was later re-employed in August 1992. When she was made redundant, she disputed her start date.
The EAT held “The respondent maintained that the claimant’s letter of resignation given on 1st October 1991 meant her employment had ceased, and subsequent employment did not reinstate her earlier service. The act maintains continuity of service where the employee has been absent by the authority of the employer but excludes from the exception where the employee has voluntarily left employment."
It's important to be able to identify when there is a break in employment and when a break does not interrupt continuous employment.
To reiterate, resignation will generally be considered a break in employment and leave authorised by the employer will be considered continuous service.
COVID-19 Redundancy Update
The Government amended redundancy payments legislation to ensure that employees who missed out on reckonable service due to Covid-19 related lay-offs would not lose out on statutory redundancy entitlements.
The Redundancy Payments (Amendment) Act 2022 moves to ensure that any employees who are made redundant will receive a statutory redundancy payment that includes any time spent on lay-off due to Covid-19 restrictions in the calculation of their redundancy entitlements.
The State will provide a maximum payment of €2,268 tax-free to bridge any gap in the redundancy entitlements of employees who lost out on reckonable service while on lay-off due to Covid-19 restrictions.
Guidance from the Department of Social Protection indicates that an employer should apply for the payment on behalf of an employee whose role has become redundant.
Unsure about continuity of service? Ask an expert…
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