Dismissing employees with less than two years’ service: what are the risks?
It is well understood that an employee requires at least two years’ continuous service before obtaining the statutory right not to be unfairly dismissed; and that to avoid a successful claim the employer needs to follow a fair procedure and have a potentially fair reason for dismissal.
When considering the dismissal of a short-term employee (one with less than two years’ service), it can be tempting to shorten the normal dismissal process, or not follow one at all. However, employers should be mindful of the type of claims beyond ordinary unfair dismissal which they could be exposed to in such a scenario.
Unfair dismissal: in some circumstances employees do not need two years’ service
Employees can claim from day one of employment:
- If the dismissal is because of, or relates to, the employee’s political opinions or affiliation;
- If the dismissal is connected with the employee’s membership of the reserve forces; or
- For most automatically unfair dismissals (e.g. for health and safety; making a protected disclosure; or for being a member of a trade union). The exceptions (where two years’ service is needed) are automatically unfair dismissals because of a spent conviction, or relating to a TUPE transfer. If a dismissal is found to be for an automatically unfair reason the employer’s procedure and the reasonableness of the decision to dismiss are irrelevant: the dismissal will always be unfair.
Breach of contract
Breach of contract claims, including wrongful dismissal. do not require any qualifying service.
If an employer doesn’t comply with an employee’s contract of employment when dismissing (for example, by failing to pay notice pay or follow a contractual disciplinary policy) the employee can claim damages for breach of contract if they have suffered loss (irrespective of length of service). The employer is also likely to lose the benefit of any contractual rights, such as post-employment restrictions preventing the employee working in competition.
If an employee is dismissed for a discriminatory reason, they will be entitled to bring a claim for unlawful discrimination irrespective of length of service. Discrimination awards are uncapped.
It will not always be obvious when a dismissal could be viewed as being related to a protected characteristic (age; disability; gender reassignment; race; religion or belief; sex; sexual orientation; marriage and civil partnership; or pregnancy and maternity). For example, where there is a period of absence during the first two years’ of service which leads the employer to consider dismissal, caution should be exercised to ensure that the absence has not been as a result of a disability. If it was, the employer would need to consider reasonable adjustments and either demonstrate that the disability was not the reason for the dismissal or be able to justify the treatment of the employee as a proportionate means of achieving a legitimate aim.
It can be tempting to circumvent a disciplinary process and jump straight to dismissal when an employee has less than two years’ service. However, think about whether there is a risk of a claim of the type listed above.
Even where there is no obvious risk, following a fair (if abbreviated) procedure for employees with less than two years’ service can be advisable in terms of protecting reputation and maintaining good employee relations.
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