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Continuity of Employment

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The Court of Appeal has handed down its decision in Bower v Stevens (& ors.), a curious case about continuity of employment in solicitors' firms.

Mrs Stevens was employed by Hughes Hooker, a solicitors' firm which "attracted a degree of notoriety", where the controlling partner was "a man well practised in flaunting the norms of professional behaviour and personal integrity in the pursuit of financial gain."

Mr Bower (who was not involved in any wrongdoing) was a salaried partner in the firm. The controlling partner did not pay Mr Bower's wages etc. for some time. By the end of 2000, there were just the two partners left who resolved to dissolve the firm on 31st March 20001. In early March, the controlling partner was struck off the roll of solicitors. By operation of law, this meant that Mr Bower became sole principal with just three weeks to go before the firm closed.

Some of the employees brought a claim against the two partners for unauthorised deductions, wrongful dismissal, unfair dismissal and redundancy payments. The controlling partner took no part (he was in and out of bankruptcy). Mr Bower argued (before the EAT and Court of Appeal) that the change in partnership from two to one partners meant that continuity of employment was broken.

Under s218(5) of the Employment Rights Act 1996, continuity of employment is deemed to be preserved when there is a change of partners. The Court of Appeal held, resolving inconsistent EAT authorities, that this includes the situation where two partners become one - which must achieve the purpose of the section - even though it did not rest easily with the natural wording of s218(5) which required a need for partners (plural) after the change to trigger the deemed continuity of employment.

Thus the employees had continuity of employment to claim unfair dismissal, redundancy payments and the longer notice periods.