Can I dismiss an employee within two years?

An employer’s plain‑English guide to when you can dismiss an employee within two years, the day‑one risks to avoid, and a short, fair process that protects your business.

Usually yes. Until law changes take effect in 2026 with the Employment Rights Bill, ‘ordinary’ unfair dismissal protection requires two years’ continuous service. However, you must avoid ‘automatic’ unfair dismissal and terminating the employment of an employee for reasons such as; discrimination, whistleblowing and health and safety , give at least statutory notice, follow any contractual process, and keep a paper trail.

Quick answer

·      You can usually dismiss employees who have less than two years continuous service (technically one year and 51 weeks), provided you do not dismiss for reasons such as discrimination, whistleblowing, H&S etc..

·      You must give statutory or contractual **notice** (after 1 month, at least 1 week) or pay in lieu, unless gross misconduct can be proven.

·      Follow any **contractual/probation** process you’ve promised; keep notes and confirm the outcome in writing. Acas Code is still good practice and helps reduce risk.

Key takeaways

·      The 2‑year rule limits ordinary unfair dismissal, but day‑one claims can be high‑risk and costly.

·      A brief process, objective reason and clean documentation can help protect the business even in probation.

·      Never rely on the 2‑year rule if protected characteristics, whistleblowing or other grounds to claim automatic unfair dismissal are in play.

·      Pay correct notice/holiday and issue a clear dismissal letter with effective dates.

·      Consider settlement where facts are sensitive or timelines are disputed.

·      Seek specialist advice to ensure claims are avoided and risk is minimised.

What does ‘dismiss within two years’ mean for employers?

Ordinary unfair dismissal protection usually starts after one year and 51 weeks continuous service. Before that, you can generally end the employment swiftly and safely provided you avoid automatically unfair reasons and honour notice and other contractual entitlement/policies. A brief, fair process and a written rationale will usually remain best practice and may save cost.

Legal duties and day‑one risks

You must not dismiss for a prohibited reason and you must pay at least statutory notice after one month unless you can prove it is gross misconduct. Screen every case for the following day‑one protections:

·      Discrimination (Equality Act 2010) including pregnancy, disability and maternity.

·      Whistleblowing (where the employee has made a qualifying protected disclosure).

·      Health and safety reasons (raising or acting on danger).

·      The long list of grounds, such as, Jury service, Trade union membership/activities, employee representation etc.

·      Asserting statutory rights (e.g., rights to National Minimum Wage, working time).

Process you should follow (even under two years)

1.      Identify a potentially fair reason (conduct, capability (e.g. poor performance), redundancy, SOSR) and ensure it is not discriminatory or automatically unfair.

2.      Check contract/handbook for: probation clause, disciplinary policy, notice, payment in lieu (PILON), and right to appeal.

3.      Decide (or take advice) on whether to run a short, fair process: outline concerns, allow a meeting and response, consider any evidence, and reach a reasonable decision.

4.      Confirm notice: this will be the greater of the contract or the statutory minimum, (after 1 month’s service, at least 1 week’s statutory notice) , unless gross misconduct can be proven.

5.      Draft and send a dismissal letter: state reason, effective date of termination, notice entitlement and how it will be paid (e.g.PILON), holiday pay and the usual other practical aspects to cover.

6.      Record‑keep: file notes, letters and rationale. Cancel IT access and retrieve property lawfully.

Fair reasons checklist

·      Conduct (warnings proportionate to the issue, unless gross misconduct).

·      Capability/performance (clear standards, feedback and reasonable time).

·      Redundancy (genuine business case; fair selection even for short service).

·      Some Other Substantial Reason (e.g., breakdown of trust, third‑party pressure).

Common pitfalls for employers

·      Citing a reason linked to discrimination (pregnancy, disability, gender etc) or whistleblowing (both of which are automatic unfair reasons and will entitle the employee to claim unfair dismissal ).

·      No paper trail: no meeting notes, unclear or inconsistent/contradictory reasons, .

·      Promising a process in the contract/handbook then skipping it.

·      Failing to pay notice/holiday or to allow statutory right of accompaniment to a formal disciplinary meeting (where one is required).

·      ‘Heat‑of‑the‑moment’ dismissals or texts without a letter or proper thought and care.

·      Assuming probation = no risk; day‑one claims still apply.

Examples

·      Probation capability: Targets missed with documented coaching. Hold a short meeting, confirm notice/PILON and handover. Low risk if no automatic unfair dismissal factors present.

·      H&S complaint: Employee reports unsafe ladder, then you dismiss for ‘attitude’. High risk of automatic unfair dismissal; seek advice or consider alternative action.

FAQs

Do I have to follow the Acas Code for a probation dismissal?

The Code is aimed at disciplinary and grievance procedures. Under 2 years it’s not always required, but following its spirit (a fair meeting and chance to respond) is sensible and may reduce risk.

What notice do I need to give?

After one month’s service, the statutory minimum is one week if under two years’ continuous service, unless gross misconduct. Pay in lieu is fine if your contract allows (or you agree it). Contractual notice may be longer.

Can I dismiss for poor cultural fit?

Be careful. If ‘fit’ masks discriminatory criteria or punishes protected disclosures, risk is high. Tie the decision to clear, job‑related reasons such as poor performance that you can evidence.

Should I offer an appeal for under‑2‑year dismissals?

This is not strictly required unless you promised one or it forms part of your process, but offering a short appeal can de‑risk and show fairness.

Can I dismiss during pregnancy or maternity?

You can, but this would be very high risk and should only happen for reasons wholly unrelated to pregnancy/maternity and with great care. Otherwise it may be automatically unfair and discriminatory from day one.

Is a settlement agreement appropriate?

Possibly, but not always. Where there are sensitive facts or potential protected reasons, a without prejudice discussion and settlement (with independent advice for the employee) can manage risk.

When to get advice / next steps

·      Screen for day‑one risks and discrimination before taking any step.

·      Seek advice early where protected reasons may be in play.

·      Hold a short, fair meeting and keep concise notes. 

·      Give correct notice or PILON and confirm in a clear letter. 

·      Recover property and disable access lawfully; calculate final pay and holiday.