As employers are aware, an employee’s full employment rights don’t come into force until they reach two years of continuous service. This two-year period is often referred to as the ‘two-year rule’ or ‘qualifying period’.
Generally speaking, within these first two years, you can dismiss an employee without a strong reason or having to follow the full dismissal process.
But this doesn’t mean that there aren’t legal pitfalls to be aware of if dismissing an employee during their first two years of employment. Certain protections are afforded to all employees from day one, including those on a probationary period.
So, what are the reasons an employer can, and can’t, dismiss an employee within their first two years of service, and what is the best practice to be followed should a dismissal within this timeframe be required?
What counts as unfair dismissal for those employed for less than two years?
Sacking an employee or employees can be one of the most unpalatable parts of an employer’s responsibility. However, painful as it is, it can be essential to ensure a business remains competitive and viable.
An employee with under two years of continuous employment may not qualify for full employment rights, however they still have a number of employee rights and protections.
An employee with less than 2 years of service who has been dismissed could claim the following:
- Automatically unfair dismissal
- Unlawful discrimination
- Breach of contract
Automatically unfair dismissal
There are certain reasons for dismissal deemed automatically unfair and, with no qualifying period required, employees can claim automatically unfair dismissal no matter their length of employment.
Reasons for automatically unfair dismissal include pregnancy, maternity, being a trade union member, whistleblowing, raising health and safety concerns or requesting a legal right – for example, the right to the national minimum wage, holiday pay, or family leave.
Automatically unfair dismissals can also be related to political affiliations or beliefs or even membership of the reserve armed forces.
As there are several reasons why dismissal during an employee’s first two years of service could be deemed unfair, employers should be mindful of any dismissals that could fall under, or even be influenced by, the reasons listed above, as failing to do so could expose them to legal risks.
Moreover, an automatically unfair dismissal is just that: automatic, meaning considerations such as how reasonable the employee’s dismissal was or how well the dismissal process was followed are, essentially, irrelevant.
Unlawful discrimination
All employees are protected from discrimination at work, no matter their length of employment.
Therefore, any dismissal that could be related to a protected characteristic (age, disability, sex, religion or belief, race, marriage and civil partnership, gender reassignment, sexual orientation) is potentially unlawful.
It’s worth noting that if the Tribunal deems a dismissal discriminatory, any damages awarded are calculated similarly to unfair dismissal claims.
However, if a dismissal is found to be due to unlawful discrimination, there is no upper limit on the compensation awarded for lost earnings. Further, an Employment Tribunal can award substantial damages for any injury to feelings suffered by the employee.
Breach of contract
For employers with dismissal or disciplinary policies and/or procedures outlined in their employment contracts, these must be followed during any dismissal process. Even when dismissing an employee with less than two years’ continuous employment, not adhering to the terms of a contract runs the risk of a breach of contract claim.
What do I do if I need to dismiss an employee with under two years’ service?
Most importantly, ensure the dismissal process is fair. Even if the employee in question is in a probation period, be sure to follow relevant policies and procedures regarding discipline and dismissal.
It always pays to play it safe, so following the same dismissal process you would for an employee with more than 2 years’ employment is a sensible way to minimise any risk of an unfair dismissal claim.
Your reasons for dismissal should be clearly explained to the employee. Make sure that a clear audit trail of the decision-making process, including the reasons for dismissal and relevant supporting evidence, is maintained.
How much notice should I give?
If an employee has been employed for less than two years but more than a month, you must give the minimum statutory notice, which is one month. However, if their contract states that the notice period is longer, you must adhere to that.
Importantly, make sure to calculate their notice pay correctly. If the notice period is not stated in their contract, then the statutory minimum notice for employees with less than two years’ service applies.
If an employee’s behaviour constitutes gross misconduct (defined by ACAS as fraud, physical violence, ‘gross negligence’ or serious insubordination), they can be summarily dismissed.
Where next?
Just because an employee with less than two years continuous employment doesn’t qualify for full employment rights, it doesn’t mean they can’t claim for automatic unfair dismissal, unlawful discrimination or breach of contract.
Therefore, if you are looking to dismiss an employee within their first 2 years, it always pays to seek expert legal advice. Handling these tricky situations well can pay dividends in demonstrating you to be a fair employer and minimise the risks of claims being brought.
If you have any queries or concerns about the dismissal or redundancy process, please don’t hesitate to get in touch. We can guide you through the process and help identify any risk factors that could have the potential to result in a claim.
Sources
- acas.org.uk/dismissals/unfair-dismissal
- assets.publishing.service.gov.uk/media/67125b939cd657734653d7e8/unfair-dismissal.pdf
- employeradvice.org/dismissal/
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