Most employers dread the hassle and cost of recruitment. But being taken to the employment tribunal by a disgruntled worker who you’ve dismissed can be equally damaging and costly. So what is the position if, within the first two years of their employment, you need to dismiss an employee?

For employees with up to two years’ service, it is easier to dismiss them for certain issues than for employees with over 2 years’ service. However, there remain some issues which you cannot dismiss them for. Whatever the circumstances, it is always a good idea to follow good practice.

Two male employees arguing over dismissal from work

Unfair dismissal claims

The first thing to bear in mind is that if your employee has been employed by you for under two years, they do not have the usual unfair dismissal rights provided by the Employment Rights Act 1996 which employees who have been employed for more than two years will have. That means they cannot bring a claim for unfair dismissal except in specific circumstances.

What you cannot dismiss an employee for

However, some reasons are deemed automatically unfair. These include dismissal relating to:

  • pregnancy and maternity;
  • discrimination;
  • whistleblowing;
  • ‘victimisation’;
  • health and safety;
  • trade unions;
  • working time;
  • minimum wage;
  • the exercising of a statutory right;
  • refusal to comply with an unenforceable zero-hours contract.

The above list is not exhaustive. It’s strongly recommended that you speak with an expert first.

Unfair dismissal represents only one of an employee’s rights: there are many free-standing claims they may have which are not covered by the two-year rule at all. Again, it is always best to check with someone knowledgeable in employment law.

Pregnant woman holding her stomach

Wrongful dismissal

An individual who has been employed for fewer than two years can also claim for wrongful dismissal if there has been a breach of the terms of their contract of employment – for example, if they haven’t been given the relevant notice period or a payment in lieu of notice. They could also claim for any untaken accrued holiday.

Fair reasons for dismissal

There are circumstances when you can dismiss an employee with fewer than two years of service. These reasons may include persistent lateness, poor performance and inappropriate conduct, amongst other things.

Adopting a dismissal procedure

Bearing in mind the above, your first step should be to check the terms of your employee’s contract of employment. Be mindful of anything in the contract relating to the dismissal procedure; you should act in accordance with those guidelines.

If the contract does not mention the dismissal procedure, you will have a measure of freedom to act. You don’t have to provide the same ways you would with employees who have worked for you for more than two years.

However, it is still good practice and will give you some protection against potential claims brought by the employee. From a legal perspective, the main aim will be to follow any process in the contract, but also to show that the reason for the dismissal is beyond doubt: not automatically unfair or otherwise unlawful.

Employee having meeting with boss about dismissal

Follow a clear process

The first step should normally be to arrange to meet with your employee to discuss your concerns. It’s also a good idea to let them know they can have some one present at the meeting and to give them advance notice of the reason for the meeting.

During the meeting, explain your concerns. Try to agree on a way in which you could help your employee improve, perhaps with additional training or support. Try and agree some clear and reasonable targets, and a timescale for achieving them. You’ll probably want to keep the time allowed for this quite short, but if you are offering a chance to put things right, then the time period should be realistic. If it is unrealistic, the employee may argue that your true reason for the dismissal is automatically unfair or otherwise unlawful. It’s worth ensuring there is a written record of the meeting and that your employee has a copy of it.

If the employee still fails to improve to the requisite standard, then you can dismiss them. Depending on your contract, you may not have to give further notice, although you can do so if you wish. Check whether you need to wait to the end of their probationary period or provide an appeal procedure in respect of your decision. Again, you should always talk to an expert before you dismiss an employee.

Although it may seem easier to dismiss an employee within two years, the key thing to remember is that this should never be done lightly. You should ensure:

  • you have followed the contract;
  • it is clear what your reasoning is;
  • that your reason for dismissal is not automatically unfair or otherwise unlawful.

Following a clear process when dismissing an employee will help make sure that your decisions and actions are appropriate, from a legal perspective.

If you are still unsure, and would like assistance, please get in touch with one of our specialist employment lawyers.

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Updates: For employers: Dismissing staff | General: News |

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