Employment relationships begin before work commences

Certain employment rights are governed by the length of service at a company, such as the ability to claim unfair dismissal and to receive statutory redundancy payments.

In a recent decision at the Employment Appeal Tribunal (EAT), EAT president Mr Justice Langstaff ruled that, for the purpose of calculating length of service, employment relationships can be considered as “governed by a contract of employment” from when a job offer is accepted rather than when the work commences.

The appeal was brought by Mr Welton, who had his employment terminated after the Deluxe Retail store in Sheffield where he worked closed down. During what would have been the next working week, he accepted a job with the same company in Blackpool, with the employment commencing the following week and ending a few months later.

The Employment Rights Acts states that when an employment relationship is governed by a contract of employment for any part of a working week, that week is considered as part of an employee’s continuous employment with a firm.

However, the gap between the two periods when Mr Welton was actually working meant he would not have had sufficient length of service to claim unfair dismissal, unless the week during which the offer of work was accepted counted as part of his continuous employment.

Mr Justice Langstaff agreed that this was indeed the case. “The week in which the contract of employment was made is a week which counts,” he said. “There was no week during the whole of which his relations with his employer were not governed by a contract of employment. On this basis, there was continuity of employment.”

New employment compensation limits

From the beginning of February, the limits for certain employment tribunal awards and other payments governed by employment legislation will be increased.

As a result, when an event resulting in compensation or payment occurs on or after 1st February, the:

• Pay cap for calculating statutory redundancy payments and the basic award for unfair dismissal will be £450 a week
• Maximum compensatory award for unfair dismissal will be £74,200
• Maximum guarantee pay per day will be £24.20
• Minimum basic award for unfair dismissal due to health and safety, employee representative, trade union or occupational pension trustee reasons will be £5,500

If the event occurs before the beginning of February, the old rates will apply, even if the compensation is awarded after the new limits have come into force.

Red tape costs to be cut faster

From this month, every new regulation imposing a new financial burden on firms must be offset by reductions in red tape that will save double those costs. The new One-in, Two-out rule will involve every government department and apply to all domestic regulation affecting businesses and voluntary organisations.

The new rule will replace the One-in, One-out regime, which the government says has reduced net costs on business by almost £1 billon since January 2011.

Announcing One-in, Two-out, Business Minister Michael Fallon said: “Every year businessmen and women still spend too much time and money complying with government regulations, when they should be developing and growing their businesses.

“That’s why we are upping the pace. It will require policymakers to make tough choices, and to think hard about how to get government off the backs of hard-working and hard-pressed businesses”.