Dismissing an employee with less than 2 years’ service UK

There is a difference between dismissing an employee with less than 2 years’ service compared with dismissing an employee with more than 2 years’ service.

Technically you do not have to justify the reason for dismissal or follow a fair procedure when dismissing an employee with less than 2 years’ service.

It is still important however to follow a fair dismissal procedure with employees with less than 2 years service in order to avoid potential legal pitfalls which may pose a risk to your business.

In any event, it is also important to always consider avoiding or minimising reputational damage and so following a fair procedure even when you don’t have to demonstrated you are a caring and reputable employer and would help to maintain good employee relations.

What is unfair dismissal?

After an employee has been employed for more than 2 years’, they gain the minimum required qualifying period of service in order to bring an unfair dismissal claim. This therefore means that dismissals after 2 years’ service need to be both for a fair reason and following a fair procedure.

There are 5 fair reasons to dismiss an employee; conduct, capability, redundancy, illegality or some other substantial reason. Your reason for dismissal must be for a fair reason for the dismissal to be fair.

Furthermore, it is important you follow a fair procedure when dismissing an employee as otherwise, again the dismissal could be deemed to be unfair opening up a liability. Following a fair dismissal process through a fair disciplinary or capability procedure will usually ensure procedural fairness is followed.

What potential problems could arise when dismissing an employee with less than 2 years’ service?

There are a number of potential problems which still could arise when dismissing an employee with less than 2 years service, despite the fact the employee would not have the minimum required service to bring an ordinary unfair dismissal claim.

Problems include:

  • Wrongful dismissal claims (or breach of contract claims);
  • Automatic unfair dismissal claims; and
  • Discrimination claims.

What is wrongful dismissal?

Wrongful dismissal is when an employee is dismissed in breach of the employment contract. These will usually concern breach of the notice period, however claims can also encompass a breach of any contractual policies and procedures.

You should always check the employment contract to understand the notice period you are required to give to your employee.

Usually, there will be a differentiation in notice requirements for any probation period and following completion of any probation period.

If there is no provision for contractual notice in the employee’s contract of employment the statutory notice period (and subsequent payment liability) will prevail. Before one month’s service, no notice period applies. Statutory notice following 1 months’ service up to 2 years’ service is one week’s notice.

This does not effect a right to summarily dismiss an employee without any notice upon committing an act of gross misconduct.

Another breach of contract claim could be brought if a payment of notice pay is made in lieu where the contract does not allow for this. Although, in reality the risk here is relatively low if the employee has not actually suffered any loss.

Disciplinary and capability procedures

It is always advised that disciplinary and grievance procedures are not contractual policies (and do not form part of the contract of employment). If however you find yourself in a situation whereby the disciplinary and grievance policy and procedures are contractual, it is vital that you ensure full compliance with the policies to avoid a breach of contract claim simply for not following these procedures.

A best practice procedure for disciplinary matters is to first investigate the matter; gather all evidence regarding the allegations and obtain any witness evidence required. Following an investigation, you should formally notify the employee they are invited to a disciplinary hearing. This letter should confirm the possible disciplinary sanction, including the potential for dismissal. The invite should provide the employee with enough notice to prepare for and attend the hearing, and should inform the employee of their right to bring along a companion or trade union representative (dismissing an employee for asserting their right to bring a representative is one of many reasons a dismissal is automatically unfair (see below) You should inform the employee of the disciplinary outcome and allow an appeal process.

Best practice procedure for capability proceedings should follow any sickness and absence policy in place, including allowance for formal meetings to discuss the employee’s reason for absence and likelihood of return, as well as consideration of any adjustments that may help their return.

What are the consequences of wrongful dismissal?

Compensation for wrongful dismissal should put the claimant back into the position they would have been in but for the breach, usually this will mean that compensation is limited to the notice period.

What is automatic unfair dismissal?

There are many reasons which have the benefit of special statutory protection, which if found the dismissal was a result of one of those reasons, will constitute an automatic unfair dismissal. No qualifying period of service is needed to bring a claim for automatically unfair dismissals, however an employee with less than 2 years’ service will have the burden to show that the reason connected to the dismissal was one of the automatically unfair reasons.

There is no test of reasonableness applied when it comes to automatically unfair dismissals. If the dismissal is found to be connected to one of the proscribed reasons, it will be automatically unfair.

When is a dismissal automatically unfair?

Amongst other reasons, the following would constitute an automatically unfair dismissal:

  • Dismissal relating to family leave (for example in relation to pregnancy or childbirth, time off for maternity or paternity leave, and even if dismissal occurs when an expectant mother requests time off to attend ante-natal appointments);
  • Dismissal relating to a health and safety concern (this would include an employee raising a health and safety concern and consequently being dismissed or when an employee asserts that they won’t attend a dangerous workplace (which was prevalent during the pandemic) amongst other reasons);
  • Asserting statutory rights; (this includes dismissal for asserting statutory employment rights listed in the Employment Rights Act, for example dismissal following bringing employment tribunal proceedings);
  • If connected to whistleblowing (this is when an employee is dismissed after making a protected disclosure);
  • Raising concerns about non-payment of the National Minimum Wage;
  • Raising concerns about non-compliance with Working Time Regulations;
  • If connected to Trade Union reasons (for example being a member of a Trade Union, taking part in Trade Union activities, using Trade Union services for example the right to representation).

There are also very specific circumstances that would constitute an automatically unfair reason for example dismissal in connection with carrying out jury service, dismissing a shop worker for refusing to work on Sunday, dismissing an employee in connection with an application for a flexible working request, dismissing an employer for performing functions as an employee representative.

What are the consequences if a dismissal is found to be an automatically unfair dismissal?

If an automatic unfair dismissal is found, the claimant would be entitled to a basic award, calculated based on their age and length of service as well as a compensatory award. The cap on the compensatory award has now exceeded £100,000 which could be a huge liability for the employer.

In certain claims, including dismissal for health and safety reasons, or for whistleblowing, there is no upper limit on the compensatory award.

Discrimination

Discriminatory dismissals will also cause a problem.

Unlawful discrimination occurs when a person is treated differently because of a ‘protected characteristic’. The protected characteristics are defined in the Equality Act: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity; race; religion or belief; sex; and sexual orientation.

With respect to disability discrimination, there is a duty on the employer to make reasonable adjustments. A reasonable adjustment could be that dismissal is avoided and instead, for example, a final warning is issued instead.

Can your employee bring an unfair dismissal claim?

The legal position is that employees with less than 2 years service will not have the minimum qualifying period to bring an unfair dismissal claim unless it is believed that the reason connected to the dismissal is automatically unfair.

How to claim unfair dismissal?

An employee can present a claim to the employment tribunal for unfair dismissal. The claim must be presented within 3 months, less one day, of the dismissal date, subject to the requirements of ACAS Early Conciliation.

If you need any advice on the above, please contact a member of our employment law team in confidence here or on 02920 829 100 for a free initial call to see how they can help.

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