Guide to dismissing an employee with less than two years service

£ 20

Our Guide to Dismissing Employees with Less Than Two Years' Service helps navigate legal obligations and procedures, minimising risks and ensuring compliance.

If you are considering dismissing an employee with less than two years continuous service, this guide will help you understand the risks and the process.

Why this guide is necessary

The Guide to Dismissing an Employee with Less Than Two Years of Service outlines the procedures and legal considerations involved in terminating the employment of individuals who have been with the company for a relatively short duration. It provides employers with comprehensive guidance on adhering to relevant employment laws and regulations, ensuring that the dismissal process is conducted in accordance with best practices.

This guide aims to assist employers in navigating the complexities of terminating employees with less than two years of service, helping them avoid potential legal disputes and safeguarding the rights of both the employer and the employee.

Additionally, the guide offers practical advice on communicating the termination decision effectively and sensitively, minimising any negative impact on the departing employee and maintaining a professional and respectful workplace environment. By following the guidelines outlined in this document, employers can handle dismissals with confidence and integrity, promoting transparency, fairness, and compliance throughout the termination process.

  • Employment Rights Act 1996: Specifies legal procedures and protections for dismissal, including requirements for fair treatment and notice periods.

  • Acas Code of Practice on Disciplinary and Grievance Procedures: Provides guidance on fair and transparent dismissal processes, including those involving employees with less than two years of service.

  • Equality Act 2010: Ensures that dismissals are not discriminatory and do not infringe upon employees' protected characteristics.

  • Data Protection Act 2018 (incorporating GDPR): Mandates the handling of personal data within dismissal procedures in compliance with data protection principles.

  • Best Practice: Documentation and Consistency: Maintain thorough documentation of the dismissal process and ensure consistency in treatment to mitigate the risk of unfair dismissal claims.

Specifications

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Time to read / prep / use
10 mins
Document specs icon
Word count / length
1105 words, 3 pages A4
Date last reviewed icon
Date last reviewed
1 June 2024
guide to dismissing an employee with less than two years service

Guide to dismissing an employee with less than two years service

Because employees with less than two years' service have less rights than those with more than two years' service, dismissal can be more uncomplicated, and the processes you adopt may be more flexible.

Unfair dismissal rights

Employees with less than two years of service cannot normally pursue an unfair dismissal claim. This means that they will have no recourse even if they believe their dismissal was not for a "fair" reason or that the approach followed was inappropriate or insufficient.

There are exceptions to this, such as where the reason for dismissal is deemed "automatically unfair" or when the cause for dismissal is discriminatory under the Equality Act 2010.

You must determine whether the basis for dismissal is (or may be seen to be) discriminatory or automatically unfair.

Automatically unfair reasons include:

  • making a flexible working request

  • being pregnant or on maternity leave

  • wanting to take family leave, for example parental, paternity or adoption leave

  • being a trade union member or representative

  • taking part in legal, official industrial action for 12 weeks or less, for example going on strike

  • asking for a legal right, for example to be paid the National Minimum Wage

  • doing jury service

  • being involved in whistleblowing

  • being forced to retire (known as 'compulsory retirement')

  • taking action, or proposing to take action, over a health and safety issue

If this is the case, it is best to follow the same method as you would for a member of staff with more than two years' service, both in terms of having a valid basis for dismissal, utilising a fair and reasonable procedure, and ensuring the employee has a right to appeal.

Notice periods

Even if an employee has less than two years of service, their contractual notice period may extend their tenure beyond the two-year milestone.

If they will have served for two years at the conclusion of their notice period, they will have full rights to claim unfair dismissal, thus an acceptable reasonable cause for dismissal must be presented and a thorough procedure must be followed.

You can prevent this by paying the employee in lieu of notice and terminating before the two-year mark.

This is permissible as long as there is a contractual right to PILON; but, if there is no provision in the employee's contract to do so, it would be illegal, and it is best to proceed on the assumption that the employee has unfair dismissal rights.

It is also worth noting that, in establishing whether someone is entitled to statutory redundancy compensation and how much that pay would be, the date their employment would have ended if they had served their notice period must be considered, regardless of whether their employment actually terminated sooner.

This means that someone with less than two years' service would be eligible to redundancy compensation if their job was terminated with payment in lieu of notice but they had served their notice period.

Written confirmation

Even if an employee has less than two year's service you still need to confirm the dismissal in writing.

There is no legal requirement to give written reasons for the dismissal at this stage, however it is sensible to do so, both in terms of being clear that there is no question of the reason being 'automatically unfair', and also because the employee is going to ask.

Gross misconduct dismissals

If the employee has less than two year's service and you are satisfied that the reason for dismissal isn't discriminatory or automatically unfair, this means that the employee cannot bring a claim if a proper disciplinary/dismissal procedure is used.

However if you want to dismiss the employee for gross misconduct, and not pay them their notice, there is a legal risk involved.

An employee can claim breach of contract from day one of employment, and if contractual notice isn't given there is a risk of this if the gross misconduct factor cannot be reasonably demonstrated.

This means that in the case of a gross misconduct dismissal, it is sensible to follow a robust procedure, with investigation, hearing, representation and appeal, to demonstrate that you have taken reasonable steps to establish that it is gross misconduct, therefore no notice is payable. Of course by the time you've done that, it might have been better to just pay the notice period, especially if the employee is only on short notice, but it's worth bearing in mind.

A note about appeals:

Allowing an employee to appeal a decision to terminate their employment, even when there's no legal requirement, can have several benefits for both the employer and the employee:

Fairness and Transparency:

  • Provides a fair and transparent process, demonstrating the employer's commitment to treating employees equitably.

  • Allows the employee to understand the reasons for termination and present their perspective.

Employee Engagement:

  • Engages employees in the decision-making process, fostering a sense of involvement and fairness.

  • Demonstrates that the employer values employees' opinions and is open to considering alternative viewpoints.

Retention and Morale:

  • May contribute to higher employee morale by showing that the employer is willing to give a second chance and invest in employees' success.

  • A successful appeal can retain a potentially valuable employee and their skills.

Legal Risk Mitigation:

  • Reduces the risk of potential legal claims or disputes by providing a mechanism for employees to address concerns internally.

  • Demonstrates a commitment to fairness, which can be important if the termination decision is ever legally challenged.

Identifying Systemic Issues:

  • Offers an opportunity to identify any systemic issues in the hiring or probation process that may need improvement.

  • Helps the organisation learn and refine its practices for future hires.

While not legally mandated, offering an appeals process aligns with principles of fairness, open communication, and employee engagement. It reflects positively on the employer's commitment to treating employees with respect and can contribute to a positive workplace culture.

Checklist

1. Determine reason for dismissal

  • Establish whether there is any possibility the employee might claim discrimination.

  • Establish whether there is any possibility the employee might claim the dismissal is for an automatically unfair reason.

2. Check contractual notice period

  • Establish whether notice would take employee over two years and trigger unfair dismissal rights or statutory redundancy pay.

  • Establish whether PILON is an option.

3. Confirm dismissal in writing with reasons.

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