A break in the chain
Employees often move around different organisations in the public sector. But is this previous service relevant to their continuous period of employment? Tim Lang looks at a recent EAT ruling on this issue.
Public sector employers are often faced with the question of whether an employee’s previous service in the same sector counts towards the employee’s continuous period of employment. The Employment Appeal Tribunal (EAT) has held in the case of Winchester and Eastleigh Healthcare NHS Trust v Walker that an employee’s continuity of service was not preserved when she moved from one NHS organisation to another.
The Claimant, Mrs Walker, had been employed in the NHS since 1983, but only by the Respondent Trust, since 2006. She brought 25 claims in the employment tribunal, a few of which succeeded, including her claim for unfair dismissal.
In a claim for unfair dismissal, a tribunal must make a basic award to a successful claimant. The basic award is calculated according to a strict statutory formula based on salary, age, and length of service, as used in calculating statutory redundancy payments. This contrasts with the compensatory award which is designed to compensate the employee’s losses and in which the tribunal has a fair amount of discretion.
Mrs Walker gave evidence in the Tribunal that she had been continuously employed since 1983 and this was not challenged by the Respondent’s representative on cross examination, only in closing submissions before the tribunal. The tribunal used a commencement date of 1983 when calculating the basic award resulting in an award of £7,525.00 rather than the £1,050 which would have been the result if the commencement date of 2006 had been used.
The EAT held that there are only two ways in which the Claimant could benefit from previous service in the NHS prior to 2006. The first is by virtue of the Transfer of Undertakings (Protection of Employment) Regulations, which did not apply in the present circumstances. The second was to invoke section 218 of the Employment Rights Act 1996 which provides that continuity of service will be preserved when moving from one NHS organisation to another only if the employee is moving between two posts of ‘relevant employment’ (for example, if the employee is a management trainee, trainee doctor etc). The EAT found that the Claimant was ‘doomed to failure’ on this point. She was a nurse practitioner and had not moved from one type of relevant employment to another. She therefore fell at the first hurdle.
Of wider significance is the EAT’s consideration of the contractual documentation in this case. The Employee’s contract stated that the commencement date in her post was 2 October 2006 and the date for statutory continuous employment with the Trust was 2 October 2006. It also stated that previous service within the NHS would be taken into account for the purposes of certain benefits. The EAT found that the documents were "wholly understandable" and that "there is a world of difference between recognising certain benefits based on service to be continued with a new employer and injecting years into a statutory construct of continuous service". In other words, just because the contract stated that previous NHS service would be taken into account for purposes such as calculating maternity pay and sick pay, did not mean that the tribunal was entitled to find that Mrs Walker had continuous service with the Trust for the purposes of calculating the basic award. The EAT accordingly reduced the basic award to £1,050.00.
Whilst this may seem an obvious decision to those within the public sector who have to deal with the concepts of continuous or reckonable service on a regular basis, it is nevertheless an important reminder of the need for unequivocal contractual documents. If nothing else, a clear statement of the commencement date and when previous service within the same sector will be taken into account will help manage an employee’s expectations as regards continuous service, which will help avoid dispute at times when calculating certain payments and benefits such as maternity pay, sick pay, annual leave entitlements, pension entitlements, notice pay and redundancy payments. Of course due regard will have to be paid to overarching agreements such as Agenda for Change or the Green Book where they set out the areas in which previous service will be taken into account.
Tim Lang is Partner and Head of the Employment practice area at Weightmans. He can be contacted on 0121 200 8111 or at This email address is being protected from spambots. You need JavaScript enabled to view it..
