Terminating Employment In The First Two Years: Why It’s Not As Easy As Many Employers Think

Once an employee has been employed for at least two years, if their employment is ended, they have the right to:

• Be given the reason for the termination.
• Bring a claim that their dismissal was unfair.

Over two years and employers will need to show one of the statutory fair reasons for the dismissal (conduct, capability, redundancy, illegality or SOSR) and, of course, to have followed the correct process.

Under two years and employers often consider it easy, no process or reason needs to be given as they can’t make claims - right? Wrong, there are many claims that can be brought under two years.

Review all employees and keep track of the service.

For this reason, it is wise for employers to review all employees at around the 21-month mark.

Regular reviews and systems to track the early period and any issues during that time, prior to two years, are crucial.

Bearing also in mind that, in specific circumstances, the statutory notice period can be used to extend service to make up the full two years too and, whilst it is basic, for the purposes of counting the period of service – remember, generally, it’s the last day of work/ ‘being on the books’ that counts and not the day you give notice.

Claims under two years

Safe to say it is much more complicated and riskier to terminate once the employee has accrued two years or is almost there. There is a myriad of claims that can be made under two years - here are some of the most common:

1. Auto-unfair dismissal - through discrimination or whistleblowing claims:
   

• Certain dismissals are “automatically” unfair even in the first two years.
  
• E.g. if you dismiss for a reason connected with pregnancy or for a Health and Safety related reason or because the employee “blew the whistle” on your wrongdoing.
• Note the requirements for such claims are strict so, if in any doubt, legal advice is essential.
• It is still possible to bring discrimination claims in the first two years, even from the application for the role stage.
• Employees could argue they have been refused a role or later dismissed because of their age, sex, race, religion or sexual orientation or because they are disabled etc.

1. Contractual claims and common statutory claims.

• Remember wrongful dismissal and breaches of contract are all viable under two years’ service.
• We often deal with clients who believed they could dismiss but unfortunately, their contracts did not permit dismissal on short notice or without bonus pay, again, check the terms before you remove an employee.
• Have you paid the correct holiday pay and minimum wage, have you adhered to all working time rules and requirements and health and safety too? These are all common areas of claim brought under two years of service.

In the writer’s experience (over 30 years as a Solicitor in employment law), it is usually possible to end the employment of employees still in their first two years fairly quickly and much more easily and at minimal cost, whereas after two years usually requires a lot more time and a more complicated process and, thus, is generally significantly more costly – though not as costly as the potential consequence of getting it wrong.

If all your employees are exemplary and you would hate the thought of any of them not being with you, you are in a great place - well done!

If that is not the case, it may be sensible to have an initial no-commitment chat with me before you take steps to remove them.

Shaun Pinchbeck shaun@bridgeehr.co.uk or 07548 767505