The length of time for which someone has been continuously employed is important because it affects their statutory rights:

1. •

   there are many rights which a person only acquires after a particular period of continuous employment

2. •

   the scope of some rights changes with the length of continuous employment

ERA 1996, ss 211–219

In order to calculate continuity of employment for the purpose of allocating the appropriate statutory rights to an employee, a statutory formula must be used. This statutory formula will override any other method of calculation in the contract of employment to the extent that the alternative method relates to statutory rights.

Continuity of employment will often also be important when assessing an employee’s contractual benefits. Many contracts will give greater benefits to employees the longer they work. For example, some employees become entitled to more sick pay once they have been working for a certain number of months or years. The statutory continuity of employment formula is often used to calculate the continuity of employment period