Two years' service and unfair dismissal

Employers will be aware that unless an employee has acquired 2 years’ service, the employee cannot make a claim for unfair dismissal.

When the employee has worked for a month they are entitled to a week’s statutory notice to terminate their employment.

Sometimes, employers make the decision to dismiss the employee shortly before they acquire two years’ service. If so, employers should remember that if statutory notice is not given the law allows the employee to add the statutory notice (or the portion not given) to their service, which may mean the employee acquires 2 years’ service.

For example, an employee who started employment on the 20 November 2016 would acquire 2 years’ service on 19 November 2018.

If the employer dismissed the employee on 12 November 2018 the employee would be entitled to add the week’s statutory notice to his service; the termination date (for calculating continuous service) would be 19 November 2018; the employee would acquire 2 years’ service and could make a claim for unfair dismissal. If the employer did not follow a proper dismissal procedure before the dismissal, the employee would almost certainly win their case.

Although the statutory notice period is a week (7 days) employers must ensure that dismissal is communicated to the employee in good time, and at least 9 days before the anniversary date. A prudent employer will dismiss earlier than that.

Although the employee must be given 7 days’ notice, remember the employee will acquire 2 years’ service 1 day before the anniversary date - not on the actual anniversary date. Also, notice does not commence until the day after it is given, so the day notice is given does not count. Hence 9 clear days are required.

Taking the example above, dismissal should be communicated (at the very latest) on 11 November 2018. If notice is communicated on 11 November 2018 it would take effect the following day, the 12 November, and the 7 days’ notice would end on 18 November 2018. The employee would not acquire 2 years’ service.

There is an exception to this rule where the employee is dismissed summarily for gross misconduct. Where an employee is (genuinely) dismissed summarily the termination date is the day the dismissal is communicated to the employee and he cannot add on the statutory notice.

However, as has been confirmed in a recent Employment Appeal Tribunal case, if the employee makes a claim and says he did not commit a gross misconduct offence the Tribunal will be obliged to make a finding of fact as to whether the employee committed an act of gross misconduct or not. If it finds the summary dismissal was justified, the employee will not be allowed to add on his statutory notice. But if the Tribunal finds the employee did not commit a gross misconduct offence, the statutory notice can be added.  

So, where an employer is considering dismissing an employee who is close to acquiring 2 years’ service, the first thing that should be done is to check the start date and keep the risks outlined above in mind.