Home Business Employment Law for Business Dismissing an Employee with Less Than Two Years' Service

Dismissing an Employee with Less Than Two Years’ Service

It is trite law that an employee has the right not to be unfairly dismissed, albeit subject to the qualifying service rule as set out under the Employment Rights Act 1996. As the law currently stands, an employee will require a period of continuous service in your employment for ‘not less than two years ending with the effective date of termination’ in order to qualify.

However, it is a common misconception amongst employers that when dismissing an employee with less than two years’ service they are free from risk against a claim for unfair or constructive dismissal. There are a number of statutory exceptions to the qualifying service rule that every employer should bear in mind when looking to dismiss an employee with short service.

Some of the most common exceptions are examined below, although this list is by no means exhaustive. If you are considering dismissing an employee with less than two years’ service you should always seek legal advice.

Where dismissing an employee with less than two years’ service is deemed to be automatically unfair

When dismissing an employee with less than two years’ service, and the reason for the dismissal is deemed to be ‘automatically unfair’, there is normally no requirement for a minimum continuous period of employment. Further, you effectively lose the right as an employer to defend your reasons for dismissal.

Typical examples of automatically unfair dismissals that require no qualifying period of service include the following:

Health and safety cases

An employee has the right not to be dismissed if they complain about or refuse to work in unsafe conditions. A dismissal will be regarded as automatically unfair in a number of different health and safety cases including:

  • where an employee brought to your attention a health and safety concern in circumstances where there was no recognised health and safety representative available
  • where an employee left, was proposing to leave, or refused to return to the workplace because s/he reasonably believed that they were in serious and imminent danger which could not be avoided
  • where an employee took, or was proposing to take, appropriate steps to protect either themself or others from what s/he reasonably believed to be serious and imminent danger.

Whistleblowing cases

Where an employee makes a protected disclosure, and is dismissed because of it, this will be deemed to be automatically unfair. Otherwise known as whistleblowing, the making of a protected disclosure is where an employee discloses information that they reasonably believe shows that some form of wrongdoing has taken place within the workplace. This includes:

  • Criminal offences
  • Breach of any legal obligation
  • Miscarriages of justice
  • Danger to the health and safety of any individual
  • Damage to the environment
  • Deliberately concealing information pertaining to the above.

Statutory rights cases

An employee is entitled to a wide range of statutory rights under employment legislation. If they are dismissed for seeking to assert these rights, either by lodging a complaint in the employment tribunal or by otherwise alleging that you have infringed their rights, this will be regarded as automatically unfair. The relevant statutory rights for these purposes include any statutory employment right prescribed by the 1996 Act entitling the employee to make a complaint to the employment tribunal.

The Employment Rights Act 1996 also makes similar provision for automatically unfair dismissals specifically relating to an employee’s right to the national minimum wage, requests for flexible working, working time cases, as well as relating to pregnancy and other maternity rights.

Other unfair dismissal cases

Further statutory exception is made to the qualifying service rule for a number of other types of dismissal cases deemed to be automatically unfair, including but not limited to:

  • improper selection for redundancy
  • refusal of Sunday working by shop workers and betting workers
  • carrying out jury service
  • acting as an employee or trade union representative
  • acting as a pension scheme trustee
  • joining or not joining a trade union.

Unlawful discrimination when dismissing an employee with less than two years’ service

When dismissing an employee with less than two years’ service you must be careful not to directly or indirectly discriminate against that individual by reason of their age, sex, disability, race, religion or belief (or any other protected characteristic) as defined by the Equality Act 2010.

By way of example, when dismissing an employee with less than two years’ service for inadequate performance, where their performance-related issues relate to a disability, you are statutorily obliged to make reasonable adjustments to ensure that they are not unfairly disadvantaged at work. Rather than dismissing the employee, you will first need to consider alternative ways to accommodate their disability.

In circumstances where an employee is dismissed, and the reason for the dismissal is linked to a protected characteristic, the employee may have a claim for unlawful discrimination.

All forms of discrimination protection apply without qualifying periods of service. Unlawful discrimination complaints will also commonly attract higher awards of financial compensation than in unfair dismissal claims.

Wrongfully dismissing an employee with less than two years’ service

When dismissing an employee with less than two years’ service this does not protect you from a claim for wrongful dismissal, or indeed any other claim for an alleged breach of the contract of employment. There is no qualifying service requirement in order to bring a claim for breach of contract.

A claim for wrongful dismissal is essentially where you break the terms of an employee’s contract during the dismissal process. Typically, this is where an employee is dismissed without notice, or with less than the minimum period as required by statute or under the terms of the employment contract. If the employee has been employed continuously for one month or more, but for less than two years, the statutory minimum notice period is one week.

In a wrongful dismissal claim the employee will usually be awarded payment in lieu of notice, unless you are able to justify summary dismissal, for example, for gross misconduct.

Procedural requirements when dismissing an employee with less than two years’ service

There are no procedural requirements or relevant codes of practice to comply with when dismissing an employee with less than two years’ service. That said, it is best to follow an accepted disciplinary procedure when dismissing any employee, not least to help reduce the risk of any unanticipated claim for unfair dismissal or unlawful discrimination.

Following a fair disciplinary procedure will also place you in a better position to demonstrate the real reason why you chose to dismiss an employee in the event that a claim is lodged against you.

Whilst you have some degree of flexibility when dismissing an employee with less than two years’ service, you should avoid any attempt to ‘fast track’ the dismissal.

Calculating the period of qualifying service when dismissing an employee with less than two years’ service

When dismissing an employee with less than two years’ service you should be cautious when calculating the qualifying period for claiming unfair dismissal. The Employment Rights Act 1996 provides that the statutory right to not be unfairly dismissed does not apply unless the employee has been ‘continuously employed’ for a period of not less than two years ending with the effective date of termination.

Normally, continuous employment must be with the same employer throughout, or with an associated employer. However, with private sector employers, the continuity of employment is not broken on the sale or other transfer of ownership of the employing business even though this results in a change of employer.

Further, when dismissing an employee with less than two years’ service immediately prior to the employee gaining the qualifying period, the employee may be entitled to include their statutory entitlement to one weeks’ notice to make up the requisite two year period.

Should I seek legal advice when dismissing an employee with less than two years’ service?

The law relating to unfair dismissal can be complex and confusing, not least the exceptions to the qualifying service rule and calculations for continuous service. If you are considering taking disciplinary action, or are in the process of dismissing an employee with less than two years’ service, you should seek expert legal advice from an employment law specialist.

A lawyer specialising in unfair dismissal and unlawful discrimination can advise you on the legalities of any dismissal decision. Your lawyer can also review your disciplinary and grievance procedures to ensure that you are in the best position to defend your decision-making when dismissing any employee, irrespective of their length of service.

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