Can employees with less than two years’ service claim unfair dismissal?

Kevin Lau examines the length of service requirements for unfair dismissal claims

Most employers are aware that when employment commenced on or after 6 April 2012, the right not to be unfairly dismissed under section 94 of the Employment Rights Act 1996 does not apply to an employee with less than two years' continuous service at the effective date of termination (for those who started before then, it was one year's continuous service). But there are other circumstances when an employee with less than two years' service may bring an unfair dismissal claim.

There are several factors that could bring the employee's service to two years (either generally, or for the purposes of making an unfair dismissal claim), and circumstances in which employees do not require any period of service to bring an unfair dismissal claim.

Statutory notice

Employees with more than a month but less than two years' service are entitled to a statutory week's notice from the employer (save for gross misconduct). If an employee is dismissed without notice, or with less than a week's notice, their date of termination for unfair dismissal purposes should be calculated by adding the statutory week.

Service from previous employment

Under the Transfer of Undertakings (Protection of Employment) Regulations 2006, employees transfer with their continuity of service intact. Employees who move from one associated company (as defined in the Employment Rights Act) to another also retain their service. There may also be sector-specific regulations governing how service is calculated for those transferring between employers, such as education and health. Employees may therefore have more than two years' service from day one.

An employee's service may not have been calculated correctly, particularly if the employer has treated ‘breaks’ in between contracts of employment as breaking continuity. Whereas generally a break of at least a week (ending on a Saturday) can break continuity, there are various pitfalls to consider including whether any break:

  • could be a ‘temporary cessation of work’ that might not break continuity of service;

  • could be an ‘arrangement’ with the employee – for example, an agreement to return at a certain date, or the employee working every third week – which would not break continuity; or

  • could be as a result of the employee being incapable of doing the work through illness or injury for up to 26 weeks. This rarely applies because usually the employee would remain employed on sick leave rather than having their contract terminated and then being re-engaged.

No requirement for service

There are several circumstances in the Employment Rights Act and under the Equality Act 2010 where no qualifying service is required. The better-known instances include dismissals relating to whistleblowing, health and safety, maternity or family reasons. Lesser-known instances include dismissals relating to jury service, shop worker Sunday working, national minimum wage and exclusivity clauses in zero-hours contracts. In some of these cases, the dismissal will be automatically unfair.

Employers should ensure that their dismissal processes are fair and Acas-compliant for all employees, irrespective of their length of service, to minimise the risk of an unfair dismissal claim. Where an employee being dismissed has less than two years' service, the employer should still be aware of the claims not requiring service, the issues around calculating continuous service correctly, and the need to be certain of the date employment commenced.

Kevin Lau is a senior solicitor in the employment law team at Blake Morgan