In the current economic climate, many employers are using career breaks to retain staff but cut costs. The generation “X” demand for more flexibility in their career has also seen a rise in employees seeking to take time off to spend time with their family, travelling or undertaking further study.
The danger in relation to allowing career breaks without proper protection in place for the Company is that employees can potentially later take advantage of rights based on their continuity of employment having continued throughout the duration of the career break. This is likely to affect both contractual and statutory redundancy policies, and any other employment rights which depend on length of service.
Follow these simple tips to minimise the scope for employees to claim that their employment continued during the career break.
- Review career break policies to check whether an “arrangement” could be implied which would indicate that there is a mutual intention that the employment relationship should continue during that career break. This was considered to be of particular importance by the Court of Appeal in Curr v Marks and Spencer PLC  which concerned an employee who had taken advantage of a career break scheme.
- Employees taking advantage of such a scheme should be required to resign. Normal arrangements such as the issuing of a P45 should take place.
- Consideration should be given to allowing employees to take up other paid employment during such a break. This was considered to be one of the decisive factors in the Curr decision.
- You should avoid continuing the employee’s pension contributions or allowing any other rights to continue to accrue during the break (e.g. SAYE schemes, etc). These were other indicators highlighted in Curr as implying that employment would continue during the career break.
- Normal company policy for prospective employees should be applied to those on career breaks when they return to work e.g. undergoing a medical examination.
- It would also be good practice for you to inform employees of the implications on their statutory rights of taking a career break, before they take advantage of such a scheme. This is likely to be best done by setting this out fully in the career break policy.