Curr v Marks & Spencer plc (2002) All ER (D)
Career breaks may not be all that they seem, according to the Employment Appeal Tribunal in Curr v Marks & Spencer plc. In a majority decision, the Employment Appeal Tribunal conclude that during a four year career break there was no contract of employment but there was continuity for the purposes of the Employment Rights Act 1996.
Mrs Curr worked as a manager for Marks and Spencer. She took a career break for four years in accordance with their management career break scheme. This involved her resigning from her job and being given her P45. During the four years there were a number of conditions. In particular, she had to keep in touch with Marks and Spencer, not take up any other paid employment, and work a minimum of two weeks each year (or part time equivalent). At the end of the four year period, she would be guaranteed a management post though it might not be in the same function or at the same level as her previous job.
Mrs Curr returned to work after her career break. Four years later she was made redundant. The issue was whether her continuous service for the purpose of calculating her statutory redundancy payment was based just on her four years service, or whether continuity was preserved before and throughout the career break.
The Employment Appeal Tribunal overturned the Employment Tribunal in finding that continuity was preserved. The basis of the decision was that the career break was a period of non-employment where continuity is preserved as set out in section 212(3) of the Employment Rights Act : 'any week...during the whole or part of which an employee is...(c) absent from work in circumstances such that by arrangement or custom, he is regarded as continuing in the employment of his employer for any purpose'. By definition, this section will only come into play where there is no actual contract of employment. But a career break scheme will nonetheless amount to an arrangement between the employer and employee relating to the employee's employment. In this case, the ongoing arrangements were, according to the majority of the Employment Appeal Tribunal, an arrangement that could only sensibly be described as 'continuing the employment arrangement', albeit not by way of an employment contract.
The most obvious implications of this decision, if it is not overturned on appeal, are that career breaks will count in calculating continuity for redundancy and unfair dismissal purposes - both in terms of calculating service in order to qualify for the rights and also for calculating compensation. It is also likely to apply in respect of other employment rights which are dependent on a period of prior continuous service, such as additional maternity leave and parental leave. It should not however mean that a woman on career break is a worker for the purpose of the Working Time Regulations (eg entitlement to paid annual leave). Nor should it mean that they are an employee for any benefits under statute or contract which are dependent on employment status such as under a contractual redundancy scheme nor in relation to rights that follow on from a dismissal such as unfair dismissal or redundancy since an employee can only be dismissed if they have an employment contract.