If you dismiss somebody who is under two years, they cannot bring an unfair dismissal claim against you.
The two-year rule is very important for employers. It is only when an employee has more than two years’ service that they are able to bring a claim for unfair dismissal.
However, as an employer you still must be very careful as an employee with under two years can still bring other types of claims including discrimination, whistleblowing and “automatic unfair dismissal”. You should always get expert legal advice particularly when you are considering making a dismissal.
Automatic unfair dismissal, which does not require two years’ service, is a claim in which the employee says that they have been dismissed because they have blown the whistle or had some other statutory right breached.
Unlike “ordinary unfair dismissal” there is no statutory cap on damages and awards can exceed the one-year loss of earnings cap (subject to maximum of £105,707).
An important tip for employers is to always ensure that you know when an employee is close to their two year anniversary. When doing this you have to account for their notice period.
In many ways it is good practice to see the first two years of employment as akin to a probationary period. Any decisions to dismiss an employee are generally much easier when the employee has less than two years’ service.
