Dismissing an employee with under two year’s service

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Dismissing an employee with under two year’s service


Written by Sue Berry on 22nd July 2017. Revised 13th July 2019.

5 min read

BYPM Search Your Fav Supplier Ad Img“My employee will have two year’s service next month. Can I dismiss them now, thereby avoiding being taken to tribunal?”

This is a question that TimelessTime consultants hear most months.

Technically, you can tell an employee that you no longer require them to work for you. You can pay them their notice and invite them to leave. Provided that you have no contractual obligation to use a protracted procedure, you might get away with this course of action.

It seems simple, but it’s not.

Some years ago, the Government succumbed to pressure from business to be able to dismiss more easily. Protection was granted to companies against claims of unfair dismissal from employees, initially for one year and then for two years. It is therefore true that an employee can’t take a claim for unfair dismissal until they’ve been with a firm for more than two years.

But fair dismissal is narrow and well-defined and hence so too is unfair dismissal.

Fair Dismissal

To understand the complexity, one must look at the definitions. A fair dismissal would be for one of the following reasons:

  • capability or job qualifications,
  • conduct,
  • redundancy,
  • legality (a statutory reason that means the employment can’t continue);
  • and what’s termed ‘some other substantive reason’ that justifies the dismissal.

To avoid the dismissal be classed as unfair – and hence to allow the employer protection against unfair dismissal claims - dismissal should adhere to one of the above reasons. Employees can claim unfair dismissal after two years continuous service (however, there are some scenarios where dismissal is automatically unfair and exempt from the service rule).

Automatically Unfair Dismissal

Where dismissal is related the following reasons it will automatically be unfair:

  • pregnancy: including all reasons relating to maternity
  • family reasons: including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants
  • representation: including acting as an employee representative
  • trade union membership grounds and union recognition
  • part-time and fixed-term employees
  • pay and working hours: including the Working Time Regulations, annual leave and the National Minimum or National Living Wage Wage.

Wrongful Dismissal

Dismissal could also be considered wrongful or discriminatory. In either case, action by the employee is not subject to anytime time limit. Employees can take cases as soon as they become employed.

Wrongful dismissal includes breach of contract and what’s termed ‘constructive dismissal’. In these cases, dismissal at any stage of employment can lead to a tribunal claim. Constructive dismissal is a special case where management undertakes action that is a serious breach of contract where the employee feels they have no alternative but to end their contract without notice.

The law is quite confusing. The two-year ‘rule’ applies only to certain types of dismissal. Even if it could be considered to apply to the specific situation, there’s plenty more opportunity for an employee to take a tribunal case.

And while remedies might be relatively light because of short service, damage to the business like the effect of dismissal on staff remaining in the business and the effect of tribunal judgments on reputation can be significant.

Run a robust process - everytime

The simplest protection against this complexity and the associated risk of having to defend a tribunal claim is to run a robust dismissal procedure in every case.

It’s essential that dismissal, irrespective of length of service, be handled fairly and according to a documented company procedure The procedure should be built and tested for its robustness against the legal principles outlined here .

If there you have no company procedures then give us a call before you take any action.

Example Sound Procedure

TimelessTime recommends that you consider the following process as an example for an employee who exhibits poor capability:

  1. Call a formal meeting in line with your disciplinary procedure, or capability procedure. It’s always best to have a capability policy for performance issues.

  2. Invite the person to the meeting in writing. Tell them what the meeting is about e.g. poor performance. Use our template letter[1].

  3. Hold the meeting. Discuss the issues and allow the employee the opportunity to respond and make their own comments. Make sure that someone in the meeting makes notes in case you need to refer to them at a later date.

  4. Having gained all the facts, make a decision about the outcome. It may be appropriate to set objectives with defined timescales and monitor the performance of the employee. If this is the outcome of the meeting, write to the employee advising them of the objectives, the success criteria and the date of the next meeting. This next meeting may lead to dismissal if there is no improvement in performance. The employee should be invited to the second meeting in writing. Again base the invitation to the meeting on the above template.

  5. If the employee continues to perform below the level required then the end result of the process could be dismissal. Use our template letter[1].

Stay Safe, Stay Professional

Since there is no length of service requirement for ‘automatically unfair grounds’ or for wrongful dismissal or for cases of discrimination it is always best to use a sound process when disciplining or dismissing employees.

As soon as it is realised that the employee may not meet the standards required during their probationary period, or at any time in the first two years, take action. Tell the employee what you expect of them. If they don’t improve, then run the process.

TimelessTime can help you develop the necessary procedures and coach you in their use. Wherever you are in the UK, give us a call and we’ll help.

  1. These documents are only available to SUPPORT clients.