What happens to an employee's continuity of service if they are dismissed but reinstated on appeal?

The general rule is that if there is a break in employment of a week or more, continuity of service is broken in accordance with s.210(4) of the Employment Rights Act 1996. However, there are a number of exceptions to this, where breaks will count towards the employee's continuous service. If an employee is dismissed and then reinstated after an internal appeal a week or more later, continuity of service is preserved.

Under the Employment Protection (Continuity of Employment) Regulations 1996 (SI 1996/3147), the continuity of service of an employee who is reinstated as a result of bringing an unfair dismissal claim is automatically preserved. In London Probation Board v Kirkpatrick [2005] IRLR 443 EAT, the Employment Appeal Tribunal held that the same principle must apply to employees who are reinstated after an internal appeal; otherwise, even where the employer has accepted that the dismissal was unfair and has agreed to reinstate the employee, the employee would still have to bring a tribunal claim to avoid a break in their service.

In Welton v Deluxe Retail (t/a Madhouse) [2013] IRLR 166 EAT, the EAT decided that the conclusion in Kirkpatrick that an arrangement for continuity to be preserved could be made retrospectively was no longer to be followed by employment tribunals. However, it pointed out that the same decision, to allow continuity to be preserved on reinstatement on internal appeal, could be reached using the second ground relied on by the EAT in Kirkpatrick. Section 212(3)(c) of the Employment Rights Act 1996 allows for continuity to be preserved if, by arrangement, the employee is regarded as continuing in the employment of their employer "for any purpose". The EAT held that this included remaining in employment for the purpose of making an appeal under pre-existing arrangements, in this case a contractual disciplinary procedure.