Unfair dismissal qualifying period

Dismissal should only be used as a last resort. But when it's needed, employers must follow all appropriate steps.

One of these steps is a qualifying period. Only certain employees are eligible for this statutory right whilst being dismissed. And they come with all kinds of legal requirements the employer needs to follow.

If you don't follow the proper steps, you could end up facing unfair dismissal claims, compensation penalties, and serious business damages.

In this guide, we'll look at what qualifying periods are, who receives them, and how to provide them during a fair dismissal process.

What is a qualifying period for a dismissal?

A qualifying period is the length of service an employee needs before they can claim unfair dismissal

Under employment law, the current qualifying period an employee needs is two years' continuous service. These employees have a legal right to make a claim of unfair dismissal. (Unless they're claiming for an automatically unfair reason).

There are five statutory reasons for an ordinary dismissal, and these are outlined under the Employment Rights Act 1996 (ERA). The law covers:

• Capability.
• Conduct.
• Redundancy. 
• Breach to a legal reason.
• Some other substantial reason (SOSR).

SOSR can cover a selection of exceptions. But this term allows an employer to fairly dismiss someone when no other fair reason is found. For example, dismissing an employee after you decided not to renew their fixed-term contract.

An employer must show a fair reason not to continue the employee's contract. But if the reason doesn't fit into the five categories, it could lead to them being unfairly dismissed.

Can you dismiss an employee with less than two years' service?

Yes, an employer is legally allowed to dismiss an employee who's worked for less than two years' service - with the same employer. This is commonly known as a short-service dismissal.

Their qualifying period is less than the required minimum; meaning they can’t claim unfair dismissal (unless it’s an automatically unfair dismissal). In most cases, the employer can dismiss them without providing a full explanation.

Despite that, they should receive a legal and fair procedure for employment termination. If you end the employee's contract unlawfully, they're legally allowed to raise an unfair dismissal claim.

Can an employee with less than two years' service claim unfair dismissal?

Only through certain circumstances can an employee with less than two years' service raise an unfair dismissal claim. These circumstances include:

Automatically unfair dismissal claim

If the employee is dismissed unfairly, they could raise an automatic unfair dismissal claim against you.

Whilst they don't have the qualifying service period needed, the law still allows them certain employment rights. For example, automatically unfair reasons for dismissal include:

• Raising a health and safety issue.
• Requesting maternity leave.
• Having a trade union membership. 
• Asking for the national minimum wage (NMW).

If they claim automatically unfair dismissal, and it's upheld by the employment tribunal (ET), you could face serious penalties. For example, like being ordered to rehire the employee or paying compensation awards.

Wrongful dismissal claim

When the employee is dismissed, and it breaches their employment terms, it could lead to a wrongful dismissal.

The employment tribunal will then look at the breach of contract – which accounts to a wrongful dismissal claim. If wrongful dismissal claims are upheld, it could lead to serious consequences.

For example, a business allows their workers to raise health and safety issues and it's outlined in their contracts.

Unlawful discrimination claim

If the employee faces a discriminatory reason for dismissal, it could lead to an unlawful discrimination claim.

Discrimination against a protected characteristic is illegal under the Equality Act 2010. Protected characteristics include:

• Age.
• Disability.
• Gender reassignment.
• Marriage and civil partnership.
• Pregnancy and maternity.
• Religion or belief.
• Sex.
• Sexual orientation.

It's important to know what protected characteristics an employee has before they're dismissed. For example, an employer dismisses them for work capability issues. But they didn't receive training on the new work conditions because they were on maternity leave.

It's their legal right to receive the training after returning from maternity leave. If an employer neglects this, they could raise this unlawful discrimination claim to an employment tribunal.

How to follow a fair dismissal based on qualifying periods

When it comes to dismissing employees, you should follow the fair procedure - complying with both your legal and moral duties.

But it all starts with finding out the full process before their employment termination date. Let's look at how to follow a fair dismissal based on qualifying periods:

Check what qualifying periods employees have

The first step to take is to check what qualifying periods some employees get.

This is easily done by checking their employment records. Only employees with more than two years or more of continuous service possess a qualifying period. Meaning, they're allowed to make a claim for unfair dismissal.

Have open communication during dismissals

Legally, an employer doesn't have to explain their reasons for dismissing an employee who has less than two years' service. (However, this is applicable depending on certain circumstances).

However, it's good practice to have open communication during all dismissal processes. Even if an employee faces a summary dismissal for gross misconduct. Make sure you keep a professional manner up until the termination date.

This leads to mutual respect - protecting your business from reputational damages and potential losses.

Consider suitable alternative employment

As mentioned, dismissal should only be used as a last resort. To encourage this, the employer should consider using suitable alternative employment when applicable.

For example, when you're dismissing an employee due to a capability issue, offer them retraining or an alternative job role instead.

The processes are different when their capability relates to ill-health or underlying disability. Employers must consider reasonable adjustments to support employees at work.

If they’re not able to return to work in the foreseeable, you may decide to end their contract through a medical capability dismissal.

Outline a short-service dismissal procedure

Short-service dismissals have their own procedure; so, it's best to outline it as a separate procedure.

This may be used when you're thinking about dismissing a new employee, or someone on a fixed-term contract. Their employer will still need to provide a good reason for ending their employment contract.

When using short-service dismissals, employers should:

• Offer written reasons for the dismissal to the employee.
• Invite them to a formal meeting.
• Check if they’re allowed the right to be accompanied during meetings (like, bringing a trade union representative). 
• Keep them up-to-date on investigation findings.

Are employees entitled to statutory notice period during dismissal?

When an employee is dismissed, they aren't always entitled to a statutory notice period and notice pay on their last day.

This depends on their service years, as well as the reason behind their dismissal. Usually, employees that are eligible for statutory notice period and pay will receive them based on their service years. The rule on notice periods is calculated in the following way:

• One notice week: For one month to less than two years' service. 
• One notice week for every year: For two to twelve years' service.
• Twelve notice weeks: For more than twelve years’ service.

If the employee faces a summary dismissal, they'll automatically lose their rights to statutory notice and notice pay on their last day. That's because the employer dismisses them for gross misconduct. For example, being dismissed for physical violence or health and safety issues.

Get expert advice on qualifying periods for unfair dismissal with Peninsula

Employers must avoid taking decisions that lead to an unfair dismissal claim. This means following a legal and fair procedure when termination an employment contract.

If you fail to provide employee rights whilst being dismissed, you could end up facing serious costs. Like tribunal claims, compensation penalties, and business damages.

Peninsula offers expert advice on qualifying periods for unfair dismissal. Our HR team offers 24/7 HR employment advice which is available 365 days a year.

Want to find out more? Seek advice from one of our HR consultants. For further support, call our telephone number 0800 029 4384.