27 Mar 2024

What is the risk in dismissing staff with short service?

It’s often assumed that dismissing staff with short service is considerably more straightforward than when dealing with a long serving employee. While sometimes this can be the case, employers should be mindful of the potential risks when dismissing an employee with less than two years’ service.

It’s true that the qualifying length of service for an unfair dismissal claim is two years, however there are other claims that could be raised against an employer if the reason for the dismissal is considered to be ‘automatically unfair’ or discriminatory.

The automatically unfair reasons for dismissal

Automatically unfair reasons for dismissal include:

  • family-related reasons, such as pregnancy, maternity leave, adoption leave or shared parental leave;
  • refusing to give up a right under the Working Time Regulations 1998 (SI 1998/1833), for example the right to a rest period;
  • whistleblowing;
  • taking action to enforce the right to be paid the national minimum wage.
  • trade union membership or activities; and
  • a TUPE transfer (where the reason is not an economic, technical, or organisational reason entailing changes in the workforce).

Similarly, if the employee could argue they have been dismissed due to a protected characteristic, they could raise a discrimination claim against the employer. The protected characteristics within the Equality Act 2010 are:

  • age
  • disability
  • sex
  • gender reassignment
  • pregnancy and maternity
  • race
  • sexual orientation
  • religion or belief
  • marriage and civil partnership

Read our useful tips on dismissing short service employees here:

The impact of protected characteristics on potential compensation awards

It’s important to consider these exceptions when dismissing a short serving employee. With discrimination claims there is no ceiling on the amount of compensation that can be awarded if a claim is successful and in 2017/18 the average disability discrimination compensation award was £30,698. An individual can also be held personally liable for any discriminatory treatment of a colleague and therefore could be liable for some of the compensation awarded to the employee.

The Acas Code of Practice on discipline and grievance should be considered as this non statutory code sets out the standards for fairness. Employment Tribunals are legally required to take the Acas Code of Practice into account when considering relevant cases and can adjust awards by up to 25 per cent for unreasonable failure to comply with any provisions of the code.

The Employment Rights Act 1996 provides five potentially fair reasons for dismissal, these are capability, misconduct, redundancy, statutory restriction or ‘some other substantial reason’. If an employer is dismissing for one of these reasons then it’s likely that the dismissal will be fair if a fair process has been followed. In a situation where an employee has less than two years’ service and has no protected characteristics then it’s likely the employer will be able to shorten their process in order to reach dismissal. However it’s not always easy to tell how to approach a dismissal situation with a short serving employee so we have outlined some frequently asked questions below:

Do I need to have different procedures in place for employees with less than two years’ service?

No, there is no obligation to have different procedures for short serving employees. However, it is useful to outline within the procedures that a process could be shortened for employees with less than two years’ service. For example, in the disciplinary procedure it’s advisable to make reference to employees with less than two years’ service and to explain that the employer may not follow all of the stages in the procedure for short serving employees. It’s advisable to make company policies non-contractual however, where it is the case that a disciplinary policy is non contractual, an employee could claim for breach of contract if the employer has not followed the procedure correctly. There is no qualifying length of service for a breach of contract claim.

Do I need to give a short serving employee a reason for their dismissal?

Legally an employer is not required to give an employee with less than two years’ service a written statement outlining the reason for their dismissal. However, it is usually recommended that an employee is informed in writing of the reason for their dismissal so that should the individual argue they have been dismissed due to a discriminatory reason, the employer is more likely to be able to defend a claim. In the absence of any documentation outlining the reason for the dismissal, it’s likely to be very difficult to put forward a defence.

Do I need to give a short serving employee the right to appeal against their dismissal?

There is no legal obligation to provide a short serving employee the right to appeal against their dismissal. However, it’s always recommended so that in the event that the individual does have a protected characteristic or is likely to raise a claim, there is a further stage at which any issues can be addressed internally. Whilst employees don’t have to exhaust their internal processes before raising a tribunal claim, it’s likely that this would give an employer the opportunity to rectify any potential procedural issues and therefore reduce risk in the event of a claim. Within the company procedure the employer could shorten the appeal process for short serving employees for example, confirm that an appeal will be responded to in writing instead of holding an appeal meeting first.

Do I need to formally invite the employee to a meeting to dismiss them or can I dismiss them on the spot?

It is always advisable to write to the employee to formally invite them to a meeting. This invite should give them the right to be accompanied and outline what the potential outcome of the meeting could be i.e. their dismissal. An on the spot dismissal, even where this is due to gross misconduct, is never recommended. Following a process is likely to give an opportunity for the employer to head off any potential discrimination claims that may arise. In addition, it demonstrates that the employer treats staff fairly.

I have a short serving employee that is underperforming, do I need to follow each step in my performance management procedure before reaching dismissal?

Depending on the wording of the Company procedure, it wouldn’t be necessary in this situation to follow each step in the performance process and this could therefore be shortened. It would be advisable to hold a meeting with the employee to give them an opportunity to respond and put forward any mitigating factors to consider. This would give the employer an opportunity to identify if there are any potential risks before reaching a decision, for instance, if an employee argued that they were underperforming due to a long-term underlying health issue which may amount to a disability, it would be wise to seek medical advice before determining the next steps. However, in the absence of any mitigating factors or protected characteristics then the risk of dismissing the individual at the first stage would be low even where there have been no prior informal discussions regarding the individual’s performance.

Do I need to carry out an investigation into a disciplinary issue before dismissing a short serving employee?

This very much depends on the context of the situation, often it’s best to carry out a reasonable investigation to determine the facts of the alleged misconduct. However if there are not any protected characteristics and the employer is confident that the misconduct has occurred then it would be reasonable to invite the individual to a disciplinary hearing with a potential outcome of dismissal without having to carry out an in depth investigation into the matter.

Final thoughts

In summary, it is often the case that a dismissal for a short serving employee will be more straight forward and processes will be much less onerous for the employer, however it’s important not to push on with a fast track dismissal in all cases for short serving employees before assessing the risks. It’s important to be mindful of the potential claims that don’t have a qualifying period such as those outlined above and keep an adequate paper trail to at least show that the reason for the dismissal was not unlawful.