For most claims of unfair or constructive dismissal, an employee must have over two years of continuous service.
However, the proposed Employment Rights Bill 2024 may change this by removing the two-year qualifying period altogether.
If implemented, this will increase the risk of claims from employees dismissed before the two-year mark.
It’s crucial for employers to stay updated on these developments.
Statutory Notice Period
When dismissing an employee, you must consider the statutory notice period, which is one week during the first two years of employment.
By adding this notice period, an employee’s service can be extended, potentially giving them further rights and increasing the risk of claims, especially if they are 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 0333 041 1094.
Exceptions to the Two-Year Rule
Despite the general rule, several exceptions allow employees to claim automatic unfair dismissal even if they haven't completed two years of service.
Here are six important exceptions to consider:
Employers often assume they don’t need to follow formal disciplinary processes with short-service employees.
While legally, an employer can choose a more streamlined process, this can lead to breach of contract claims if the employee’s contract doesn’t clearly specify that standard disciplinary processes don’t apply within the first two years of employment.
In cases where contracts are ambiguous, dismissed employees may argue that failure to follow disciplinary procedures amounts to a breach of contract, which could allow them to pursue a claim.
Discrimination
Employees have the right to be free from discrimination from day one of their employment.
This also applies to applicants during recruitment.
If a dismissal is related to a ‘protected characteristic’ under the Equality Act 2010 - including age, disability, race, religion, sex, or others - the employee can bring a discrimination claim regardless of length of service.
Employers should be aware of the following protected characteristics:
- Age
- Disability
- Gender reassignment
- Marriage and civil partnership
- Pregnancy and maternity
- Race
- Religion and belief
- Sex
- Sexual orientation
When dismissing an employee, consider whether any of these characteristics may be a factor.
For instance, if an employee’s capability issues are related to a disability, failing to make reasonable adjustments could lead to a discrimination claim with uncapped compensation.
Therefore, it’s prudent to seek medical or occupational health advice before proceeding with a dismissal in cases where a protected characteristic may be relevant.
Protected Disclosures (Whistleblowing)
Employees are protected from being dismissed or facing detriment for making a ‘protected disclosure’, commonly known as whistleblowing.
This can include disclosures about criminal offences, breaches of legal obligations, risks to health and safety, or environmental harm.
If an employee raises concerns about these issues before their dismissal, they may claim that their dismissal was linked to whistleblowing.
Since compensation for whistleblowing claims is uncapped, employers should proceed carefully if an employee has raised any such issues.
Reasons Related to Health and Safety
It is automatically unfair to dismiss an employee for taking action on health and safety matters.
This protection applies from day one and includes employees who raise health and safety concerns or perform roles focused on health and safety risk prevention.
If, for example, an employee reports a workplace hazard or actively performs health and safety duties, they are protected from dismissal due to these activities.
Employers should exercise caution when dealing with health and safety-related complaints or feedback to avoid potential claims.
Asserting A Statutory Right
Employees are also protected from dismissal for asserting specific statutory rights, even if they have less than two years of service.
For example, if an employee raises concerns about receiving below the National Minimum Wage or non-compliance with the Working Time Regulations, they are shielded from dismissal related to these issues.
Similarly, employees who assert rights under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) are protected.
Employers should assess any statutory rights claims made by an employee to avoid claims for unfair dismissal.
Trade Union Activities
Dismissals linked to an employee’s status as a Trade Union Representative, involvement in union activities, or participation in union meetings or events are considered automatically unfair, regardless of the employee’s length of service.
Employers must be mindful that union-related activities are heavily protected, and dismissing an employee due to their union role or participation can lead to significant claims.
Additional Considerations
- Avoid Hasty Decisions: Take time to carefully consider all factors before moving forward with a dismissal.
- Maintain Documentation: Keep thorough records of any performance or behavioural issues to defend against potential claims.
- Investigate Grievances: If an employee raises a grievance, investigate it thoroughly before making a dismissal decision.
- Ensure Consistency: Consistency in handling dismissals is crucial to avoid allegations of unfair treatment.
Employers Need to Be Cautious
Given the variety of ways an employee can bring a claim, even with less than two years of service, it’s essential to assess each situation comprehensively.
If a dismissal is necessary, ensure that the reasons are clear, well-documented, and unconnected to any potential claims.
While employees gain full employment rights after two years, the risks associated with dismissing employees with shorter service remain, especially in light of potential upcoming legislative changes.
Practical Tips for Short-Service Dismissals
- Document Everything: Keep a clear record of any issues, including performance or conduct concerns. This can be invaluable if a claim arises.
- Stay Consistent: Apply the same standards and procedures across all dismissals to avoid claims of unfair treatment.
- Be Mindful of Notice Periods: Always provide at least the statutory notice, and be cautious when an employee is close to the two-year mark.
- Check for Protected Characteristics: Before dismissing, review whether any protected characteristics under the Equality Act 2010 might be relevant.
- Follow Up on Grievances: If an employee raises a grievance, ensure it’s thoroughly investigated before any dismissal action is taken.
By following these tips, employers can navigate short-service dismissals with greater confidence and reduce the risk of costly claims.
