Dismissing An Employee Within 2 Years’ of Service

Dismissing an employee with less than 2 years service is considered 'low risk' but be mindful of the exceptions which can lead to a tribunal.


James Rowland

Commercial Director James leads Account Management, Sales and Marketing at Neathouse Partners.


02 October 2018


16 July 2024
5 min read
Dismissing An Employee Within 2 Years’ of Service

Is It Safe To Dismiss An Employee With Less Than Two Years Of Service?

An employee will need over two years of continuous employment with their employer to bring a claim for unfair dismissal or constructive dismissal.

Once over this two-year point, an employee is considered to have 'full' employment rights under UK Employment Law.

This means that before two years, an employer can be more commercial when considering ending an employee's employment, but this isn't without risks.


Include The Statutory Notice Period

One crucial point to consider is factoring in the statutory notice period.

Statutory notice in the first two years of employment is one week.

So to terminate an employee's employment, the employer must provide at least the statutory notice period, which will mean adding the one-week notice period onto the length of employment.

This could give the employee further rights and make the dismissal riskier.

In practice, this is only going to be of significant importance if the employee is approaching the two-year anniversary.

If you’re looking for advice on dismissing an employee who has less than two years of service, we cover everything you need to know in this article to ensure that you understand the correct steps to follow to avoid a costly employment tribunal claim. For more advice call 01244 893776.

Exceptions To The Two Year Rule

There are some exceptions to the two-year rule outlined below.

These exceptions would allow an employee to claim Automatic Unfair Dismissal in certain scenarios if the dismissal is for one of these reasons.

6 Important Points To Consider When Dismissing An Employee

  1. Breach Of Contract Claims
  2. Discrimination Dismissals
  3. Making A Protected Disclosure (Whistleblowing)
  4. Reasons Relating To Health And Safety
  5. Asserting A Statutory Right6
  6. Being A Trade Union Representative

1) Breach Of Contract Claims

Many employers take the view that as an employee does not have the right to bring a claim for Unfair Dismissal, there is no requirement to go through the formal disciplinary process (Acas Code Of Practice).

Legally, there is nothing wrong with this approach.

If you take the business decision that you do not wish to go through the formal disciplinary processes, you must ensure that it states in the Contract of Employment that the standard disciplinary rules do not apply during the first two years of employment.

If you do not, it could be open to an employee to bring a claim for breach of contract.

2) Discrimination

An employee’s right not to be discriminated against is effective from the first day of employment.

It also applies pre-employment. Employers should take care when interviewing prospective employees but, more importantly, when rejecting their application.

If the rejection relates to a ‘protected characteristic’, a prospective employee can bring a claim against you.

Care should be taken when advertising jobs as, for example, an advert seeking a “school leaver” could be seen as discriminating against older candidates.

A claim that is related to a ‘protected characteristic’ will entitle an individual to bring a discrimination claim for which an individual does not need any specific qualifying length of service.

Therefore, it is crucial for employers to be aware of the protected characteristics and to ensure that none are present or a potential issue when dismissing an employee with less than two years’ service.

Protected Characteristics Covered by the Equality Act 2010:

  • Age
  • Disability
  • Gender reassignment
  • Marriage and civil partnership
  • Pregnancy and maternity
  • Race
  • Religion and belief
  • Sex
  • Sexual orientation

When considering dismissing an employee, an employer should first consider whether any of these characteristics are present and whether an employee could allege that their employment has been terminated for one of these reasons.

Be careful when considering whether you should dismiss an employee for issues regarding their capability in their role.

It might be the case that their capability is hindered by a disability, giving the employee the basis for a discrimination claim.

If the employee does have a disability, the employer would be under a legal duty to consider any reasonable adjustments which could be made to assist the employee in their employment.

In addition, obtaining a medical report or occupational health assessment would be prudent before considering dismissal.

If you do not, and they bring a Claim, compensation is uncapped and such claims can be expensive and time-consuming.

'Other Claims' Considered Automatically Unfair

There are also some other Claims that are considered automatically unfair, which means that employees can bring these Claims from the start of their employment.

To avoid litigation, Employers should consider whether any of these issues below are present before merely dismissing an employee regardless of their length of service.

3) Making A Protected Disclosure (Whistleblowing)

If an employee is dismissed for making a Protected Disclosure (whistleblowing), they are protected from being subject to any detriment due to this and dismissal.

Compensation for such Claims is also uncapped, so employers should be careful if an employee has raised an issue before their dismissal that would be considered whistleblowing, such as:

  • Criminal offences;
  • Breach of any legal obligations;
  • Miscarriages of justice;
  • A danger to the health and safety of any individual;
  • Damage to the environment;
  • The deliberate concealing of information about any of the above.

Other factors may constitute 'Protected Disclosure', such as an employee believing they have been treated poorly and subsequently raising a grievance about the issue; following this up with a dismissal based upon the employee being a ‘bad apple' may lead to the employee being able to make a claim.

4) Reasons Relating To Health And Safety

It is automatically unfair to dismiss an employee for reasons connected with health and safety whereby the employee took action about a health and safety issue.

The right to bring a Claim connected to Health and Safety arises from the start of employment.

For example, where an employee has been designated to carry out activities in connection with preventing or reducing risks to health and safety, they are protected from being subject to any detriment or dismissed due to carrying out those duties.

5) Asserting A Statutory Right

Employees are protected against being subject to a detriment or being dismissed if they assert a statutory right and any such dismissal would be automatically unfair.

There are limited statutory rights that this would apply to, such as asserting that the National Minimum Wage is not being paid, rights under the Working Time Regulations 1998 and rights under the Transfer of Undertaking (Protection of Employment) Regulations 2006.

6) Being A Trade Union Representative

If an employee is a Trade Union Representative or has taken part in any Trade Union Activities, any dismissal connected to that reason will be automatically unfair.


Is There Anything Else You Should Consider?

  • Avoid making quick decisions regarding dismissal;
  • Ensure you have a paper trail of evidence kept about the employee – this will be useful if the employee does make a claim;
  • If an employee raises a grievance during the process of dismissal, it is up to you to make sure your organisation investigates it properly;
  • Be consistent! When dismissing one employee, do your best to make sure that you dismiss any other employees for the same offence. Treating one employee differently during dismissal could amount to unfair treatment.

Employers Need To Be Cautious

Given that there are so many ways in which an employee can bring a claim in the Employment Tribunal despite not having two years of service, it is imperative that employers assess the wider picture.

Employers need to determine whether there are other risks which may be relevant, which an employee could suggest were the real reason for their dismissal.

Not all situations can be completely risk-free, but if, following an assessment of potential risk, an employer continues down the path of dismissal, it is advisable to make clear as to why the employee is being terminated and ensure the dismissal is backed up by evidence, unconnected to the other issues.

Evidence and reasoning to support the dismissal would help defend a vexatious claim, but still would not guarantee a successful defence, and this can often result in a costly tribunal claim for employers.

Always consult a specialist Employment Law adviser before taking any dismissal action against an employee.

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