Dismissing an Employee with Under 2 Years’ Service in the UK

In the UK, dismissing someone with less than 2 years’ service can seem easier than dismissing longer-serving staff. This is because employees with less than 2 years’ service don’t have the right to claim ordinary unfair dismissal. But employers still have to follow the employment law and consider the key legal requirements to make sure the dismissal is both lawful and fair. Mistakes can lead to claims for wrongful dismissal, breach of contract, or automatically unfair dismissal which don’t require the 2-year qualifying period. Seeking expert advice from Darwin Gray, specialists in employment law, can help ensure the process is handled lawfully and fairly, minimising legal risks.

This guide gives employers and HR professionals practical advice on how to dismiss short service employees while minimising risk. From automatically unfair reasons to a structured dismissal process this resource will help you do it right. Properly managing these dismissals reduces the risk of dismissal claims and maintains workplace morale and demonstrates your commitment to best practice.

The 2 Year Threshold

Under UK employment law employees gain the right to claim unfair dismissal after 2 years continuous service. This means an employee with less than 2 years service usually can’t bring an unfair dismissal claim. But don’t interpret this as permission to dismiss staff without accountability. Certain automatically unfair reasons such as those related to discrimination, pregnancy and maternity or protected activities apply regardless of the employee’s length of service.

While dismissing short service employees may seem easier, employers must still act responsibly and within the law. Mistakes can lead to claims for wrongful dismissal, breach of contract or other legal issues which can be costly and damage the employer’s reputation. Employers must make sure the reason for the dismissal is valid, documented and compliant with the employment law. Acting ethically in the process also builds trust, maintains morale and benefits the organisation as a whole.

Automatically Unfair Dismissals

Some reasons for dismissal are automatically unfair even if you have less than 2 years service. If an employer dismisses you for one of these automatically unfair reasons you can claim automatically unfair dismissal at an employment tribunal regardless of how long you’ve been with the employer. Examples include:

Pregnancy and Maternity: Dismissing someone because of pregnancy, maternity leave or related reasons is not allowed.

Whistleblowing: Terminating someone for raising health and safety concerns or making a protected disclosure.

Discrimination: Dismissing someone because of a protected characteristic such as religion or belief, sexual orientation or marriage and civil partnership.

Trade Union Activities: Dismissals related to lawful trade union participation or activities.

Employers must check the reason for dismissal to make sure it doesn’t fall into one of these automatically unfair reasons. These are set out in the Employment Rights Act 1996 and apply regardless of how long the employee has been with the employer. Ignoring these rules can have serious legal and financial consequences and damage to the employer’s reputation.

Reasonable Grounds for Dismissal

Even when dismissing someone with under 2 years’ service in the UK, having a reason for the dismissal is crucial. This reduces the risk of unfair dismissal claims, wrongful dismissal allegations or breach of contract. Dismissing fairly also means the process complies with employment law and ethics even if the employee has less than 2 years’ service.

Common reasons for dismissal include:

Conduct

This includes gross misconduct, breaches of company policies or behaviour in the workplace. Employers must have evidence to support their decision and ensure investigations into misconduct are thorough and impartial. For employees with less than 2 years’ service, documenting the investigation process can help avoid disputes or dismissal claims.

Capability

Dismissals based on capability can arise from poor performance or inability to do the job. Employers may need to give clear feedback, training and reasonable opportunity to improve before taking action. Making sure the dismissal is based on a reason for dismissal protects against claims for wrongful dismissal or breach of contract.

Redundancy

When a role is no longer needed due to restructuring, business changes or reduced demand, redundancy can be a reason for dismissal. Employers must have objective criteria to determine redundancy and decisions must not be discriminatory. For employees with less than 2 years’ service redundancy decisions still need to follow fair procedures to avoid unfairness.

Employers may also consider continuous service and the employment rights act 1996 to make sure dismissals are legal. Although employees with short service can’t normally bring a claim for ordinary unfair dismissal, fairness and professionalism is good practice. Employers should ensure all reasons for dismissal have evidence and follow the ACAS Code of Practice.

Procedural considerations

Although not required by law for employees with less than 2 years service, it’s always best to follow a procedure. This helps to mitigate risk and demonstrate compliance with employment law. A procedure benefits employers by:

Maintaining Workplace Morale: Fairness builds trust with employees and a positive working environment especially when dismissing employees with short service.

Reducing Legal Risks: Following the ACAS Code of Practice reduces the chance of claims for automatically unfair dismissal, wrongful dismissal or breach of contract.

Recommended procedure

Investigation: Employers must have thorough facts to support the decision to dismiss e.g. performance reviews, reports of gross misconduct or evidence of role redundancy. This step ensures dismissals comply with employment law.

Meeting: Have a formal meeting with the employee to discuss the issues. This gives you the opportunity to explain the reason for dismissal and for the employee to respond. Even for an employee with less than 2 years service this shows transparency and professionalism.

Decision: Review all the evidence to ensure the dismissal is for potentially fair reasons e.g. capability, conduct or redundancy. Employers must not dismiss for automatically unfair reasons e.g. discrimination or raising health and safety concerns.

Documentation: Keep a detailed record of the dismissal procedure including evidence, meeting notes and the reason for the decision to dismiss. These records can defend against claims of automatically unfair dismissal or breach of contract.

Right to Appeal: Offering an appeal even when not required by law shows you are following a fair procedure. This step reduces the chance of disputes or legal action.

By following these steps employers can dismiss responsibly and legally even for employees with less than 2 years service. Following the employment rights act 1996 and being professional will help create a positive workplace culture and reduce risk.

Notice periods and final pay

Employees with less than 2 years service are still entitled to statutory or contractual notice periods as set out in their contract of employment. An employer must give the required notice period or payment in lieu of notice (PILON) if the notice is not worked. Failure to do so can lead to claims for dismissal including breach of contract or wrongful dismissal.

In addition to notice pay employers must ensure employees receive:

Accrued Holiday Pay: Payment for any unused annual leave.

Outstanding Wages: Payment of all earned wages up to the termination date.

Bonus or Commission: Any due payments as per the employee’s contract.

Failing to do so breaches employment law including the Employment Rights Act 1996 and can damage the employer’s reputation. Check the employment contract to ensure compliance and avoid disputes. Proper documentation and communication on final pay reduces risk and fairness when dismissing an employee with less than 2 years service in the UK.

Beyond Unfair Dismissal

Even employees with short service who can’t bring an ordinary unfair dismissal claim may still be able to bring a claim in certain circumstances. These claims don’t require the 2 year qualifying period and include:

Discrimination: If the dismissal is because of a protected characteristic under the Equality Act 2010 such as sexual orientation, religion or belief, or marriage and civil partnership, an employee can claim regardless of how long they’ve been with the employer. Employers must not dismiss because of bias or prejudice.

Wrongful Dismissal: If an employer fails to honour the terms of the contract of employment, such as not giving the correct notice period or payment in lieu, the employee can claim.

Automatically Unfair Dismissal: Pregnancy and maternity, raising a health and safety concern, whistleblowing or trade union activities fall into this category. These are automatically unfair reasons and apply to any employee with less than 2 years’ service.

Employers should be careful when dismissing to avoid breaking the law. These types of claims can result in hefty penalties at an employment tribunal and damage the company’s reputation. Following a fair procedure and documenting the reason for dismissal will ensure compliance with the law and reduce risk.

Employer Guidance

To avoid disputes when dismissing an employee with less than 2 years’ service, follow these best practices:

Follow a Fair Procedure: While not mandatory, having a structured dismissal procedure shows fair reason for the termination and compliance with the ACAS Code of Practice. This will reassure remaining employees that dismissals are fair and reasonable.

Document Everything: Keep full records of performance reviews, warnings and actions leading up to the decision to dismiss. Good documentation will help the employer’s case in any unfair dismissal claim, including automatically unfair reasons.

Get Legal Advice: Consult employment law specialists to deal with tricky situations such as wrongful dismissal or breach of contract claims. Proper legal advice will ensure compliance with the Employment Rights Act 1996 and reduce the risk of claims.

Train Managers: Train managers to handle dismissals for employees with short service. Training should include guidance on gross misconduct, honouring the contract of employment and automatically unfair dismissals or discrimination claims.

Following these will protect the employer’s reputation, ensure lawful behaviour and reduce the risk of disputes when dismissing employees with less than 2 years’ service in the UK.

Frequently Asked Questions

1. Can I sack an employee without reason if they have less than 2 years’ service?
Dismissing an employee with under 2 years’ service in the UK may seem simpler but it’s always best to have a reason for dismissal to avoid potential discrimination or automatic unfair dismissal claims. Employees with less than 2 years’ service can’t bring an ordinary unfair dismissal claim but you still need to ensure your decision to dismiss is lawful and in line with the law.

2. What are automatic unfair reasons for dismissal?
Automatic unfair dismissal applies where an employee is dismissed for reasons such as pregnancy and maternity, whistleblowing or raising health and safety concerns. These claims are not dependent on the employee’s length of service. You must not dismiss an employee for asserting statutory rights or participating in protected activities such as joining a trade union. Failure to comply with the Employment Rights Act 1996 in these cases can result in significant penalties at an employment tribunal. Dismissing an employee with less than 2 years’ service for any automatic unfair reasons can also lead to costly and damaging claims against you.

3. Do I have to follow a procedure for employees with short service? Not legally required but highly recommended. Following a fair procedure when dismissing an employee with less than two years’ service demonstrates professionalism, reduces legal risk and maintains morale in the workplace. A procedure helps prevent allegations of bias or inconsistency. Employers should document everything, follow the ACAS Code of Practice and be fair when making the decision to dismiss. This will help the employer’s position if there’s a dispute about wrongful dismissal or breach of contract.

4. Are employees with short service entitled to notice pay?
Yes, all employees, including those with less than two years of service, are entitled to statutory or contractual notice periods. Employers must give the required notice period or payment in lieu of notice (PILON) if the notice is not worked. Final settlements must also include accrued holiday pay, outstanding wages and other contractual entitlements as set out in the employee’s contract of employment. Failing to give the correct notice or payment can lead to breach of contract claims or wrongful dismissal disputes.

Conclusion

Dismissing an employee with under 2 years’ service in the UK requires thought to make sure you’re following the law. Employees with less than 2 years’ service have limited protection against unfair dismissal but employers need to be careful especially where exceptions such as automatically unfair dismissal or discrimination apply. Employers must have a reason for the dismissal, follow the ACAS Code of Practice and comply with the Employment Rights Act 1996.

By following a fair process, keeping a record of the decision to dismiss and consulting with employment law experts employers can reduce the risk and manage dismissal claims. Doing so avoids disputes at a tribunal and builds trust in the workplace. Being transparent and ethical when dismissing employees creates a positive and lawful workplace culture for everyone.