Seasonal employees can be a handy (and sometimes essential) addition to your workforce to manage customer or business demands throughout the year – for example in agriculture, hospitality, distribution and retail.

To manage seasonal demands and balance the peaks and troughs throughout the year, you may use employees engaged on temporary contracts – essentially short, fixed term contracts – to meet demand and bridge the gap in resources.

However, such contracts are sometimes not used in isolation, with the same individuals returning year on year to perform seasonal work. This raises an important question for you: Is there a risk that these employees could be accruing continuous service for the purposes of, amongst other things, unfair dismissal protection and statutory redundancy payments?

The initial reaction might be “absolutely not, the seasonal employee’s role and employment was just for that seasonal period – the end!”. However, sometimes, it isn’t the end, and continuity of service can be preserved from one period of employment to the next.

What is a seasonal or fixed term contract?

A fixed term (or seasonal) contract is a contract of employment (like any other), but it is used for roles that are temporary in nature and therefore does not, of itself, confer permanent employment on the individual.

A fixed term contract usually expressly sets out when the contract starts and when it is to end. For example, 1 March 2025 to 30 November 2025. Depending on how the contract is drafted, the fixed term can be purely for that period, or there could be the opportunity for it to be terminated by either party part way through – either way, it is still temporary in nature.

What is continuity of service?

Continuity of service, also known as continuous employment, is the period of uninterrupted time an individual has worked for an employer. Continuous employment is a statutory concept and is key to determining whether individuals are eligible for certain employment protections such as, for example, (at least pending the Employment Rights Act) employees with two years continuous service having the right not to be unfairly dismissed and the right to receive a statutory redundancy payment.

Most employers have this two-year mark subconsciously in their head when thinking about permanent employees, but when looking at temporary or seasonal employees, this mechanism is likely not to be considered because the individuals are employed for shorter and more temporary periods.

When is the end not always the end?

It might sound logical that when a fixed term contract ends, the individual’s continuity of service also ends (and this is typically the case) but this isn’t always the case.

In fact, continuity of service can be preserved where an employee works for an employer over a series of fixed term contracts, often associated with seasonal (or temporary) work. For example, an employee may work in hospitality over the summer period to cover the peak holiday season, or work as an agricultural labourer over the planting and harvesting periods and they go back each year to work for the same (or similar) period for the same employer.

This practice of repeatedly returning for a season could provide the individual with an argument that there has been a temporary cessation of work in-between these periods of seasonal work and not a formal break in service. If an individual argues this point successfully, then the individual’s continuity of service will be preserved and, subject to how much continuity they’ve accrued, could mean they’ve gained more service, and therefore accrued certain employment rights, than originally envisaged.

What is a temporary cessation of work?

There are three elements to a temporary cessation of work (as derived from case law):

1. There must be a cessation of work – this cessation can affect the whole workforce, a certain group (including the individual) or just the individual
2. The individual’s absence must be due to the cessation of work – i.e., the role ended because the work was no longer there, and/or it was the end of the relevant season and not because they left for some other reason
3. The cessation must be temporary – there is no statutory definition of temporary and it is a matter of fact for a Tribunal to determine with the matter being looked at “in the round” and with hindsight.

This still raises the question, and an element of doubt, about when the end of a fixed term contract will amount to a temporary cessation of work. Unfortunately, UK employment legislation does not shed any light on this question, and rather it is the Employment Tribunal that will interpret the facts of each claim on a case-by-case basis and make a decision based on the individual facts.

How does an Employment Tribunal assess claims of continuity of service?

A common approach taken by the Employment Tribunal, particularly where gaps in employment are regular and predictable, is a mathematical approach. The Tribunal will compare the number of months for which the individual is employed against the number of months for which they are absent. Using the example duration above of 1 March to 30 November, it is eight months in role against three months not in role.

In performing this calculation, if there is an imbalance between the two, as is the case with our example, the individual is more likely to retain continuity of service as the gap between each fixed-term contract remains short.

However, based on case law, the following factors also provide weight when assessing whether an individual preserves continuity of service:

• the number of years for which the working pattern has been in place (with a frequent/annual returner having a stronger argument for continuity being preserved)
• the parties’ intentions (i.e., any conversation or documentation to suggest the employer kept in touch with the individual during the break and intended for that individual to return to the role next season)
• whether the employer employs new seasonal workers each year or relies on the same individuals returning to the role
• what happens to company property during the break (i.e., does the individual retain any work equipment, keys or uniform during this time or is it all given back to the employer)

When assessing whether continuity of service has been preserved, the Employment Tribunal will also apply hindsight to the situation and consider whether at the end of each contract, the cessation was temporary, noting that it does not matter what type of contract the individual is employed under at either side of the gap. For example, the individual could have a series of fixed term contracts interspersed with a permanent contract.

You may think that the individual’s continuity must be broken because they’ve worked or provided services elsewhere during the ‘off’ months – but the fact of an individual working for another employer during the break is not automatically fatal to an argument of continuity being preserved.

It is clear, based on case law, that where an employer employs the same individuals over a period of time, on a temporary basis, you face a real risk of those individuals retaining continuity of service.

As such, you should proceed with caution when considering terminating the employment of an individual who might have established two or more years’ continuity of service as they may have earned the right not to be unfairly dismissed and the right to receive a statutory redundancy payment. Whilst you should not be discouraged from employing seasonal workers in line with business demands, you should be clear in your intentions from start to end of the relationship.

Practical steps you should take

Other steps you can take to mitigate these risks include:

1. Considering your current seasonal worker practices – for example, do the same individuals return each season and are there repeat working patterns?
2. Reviewing your current seasonal (or temporary) contracts to mitigate risks of continuity of service being inadvertently retained;
3. Considering employing different individuals each season; and
4. Keeping your personnel and HR records up to date and implementing practices to identify repeat working patterns for temporary workers.

If you need support in reviewing your seasonal contracts, we’re here to help, please reach out to our Employment & Immigration team for any advice.