Understanding Short Service Dismissal: Rights and Procedures

What does short service dismissal mean?

Short service dismissal is the term used for letting an employee go when they have worked for you for less than two years. During this timeframe, the employee does not have the full rights to claim unfair dismissal. This means you can speed up the dismissal process depending on your company’s usual disciplinary procedure.

Despite this you need to ensure you follow the right procedures as failure to do so may put you at risk of allowing the former employee to claim ‘automatically unfair dismissal’ or dismissal by discriminatory means.

When is a short service dismissal protected?

An automatically unfair dismissal occurs when the dismissal breeches an employee’s statutory legal rights. There are over 50 grounds for which an employee can claim automatic unfair dismissal however many are rare. Here are the most common grounds:

Family-related: Dismissals regarding maternity or paternity, shared parental leave or adoption leave. If an employee feels they have been dismissed on the grounds of taking their legal right, they can automatically claim unfair dismissal.

Refusing to give up certain rights: There are a few statutory rights which allow an employee to automatically claim unfair dismissal, such as refusing to work over 48 hours a week or insisting on being paid the national minimum wage.

Refusing to carry out certain tasks: Staff members who reasonably refuse to carry out certain tasks which may put them or others at risk in the workplace can claim unfair dismissal.

Trade union membership: Employers are also not able to dismiss an employee for joining or being affiliated with a trade union. Under UK law employees have the right to be part of a trade union, leave a trade union, or be a member of multiple trade unions.

Protected characteristic: When going through your dismissal process you must be aware that you are not letting an employee go because of a protected characteristic:

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

It is good practice to consider these exceptions when dismissing a short serving employee. With discrimination claims there is no set amount of compensation that can be awarded if a claim is successful.

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What are the legalities?

Legally, unless bound by a contractual obligation to follow a specific procedure, an employer is not strictly required to conduct a formal disciplinary or dismissal process. However, to mitigate the risk of an employee later claiming automatic unfair dismissal, it is advisable for employers to follow at least a minimal procedure before dismissing a short-service employee.

A structured approach allows employers to identify any underlying concerns and potential grounds for automatic unfair dismissal. Some protected characteristics may not be immediately apparent and implementing a process can help demonstrate that the stated reason for dismissal is genuine. For instance, if an employer cites redundancy as the reason for dismissal but lacks supporting documentation, it may struggle to refute claims that the real motivation was the employee’s prior grievance against the company.

Legal Pitfalls to Consider

A key starting point is accurately determining the employee’s length of service. This ensures the correct classification of an employee as short service. Employers must count both the first and last day of employment. For example, if an employee starts on August 12 and their notice period ends on August 11, two years later, they will qualify for unfair dismissal protection.

If an employee is nearing two years of service, an employer may be tempted to dismiss them without notice. However, Section 97 of the Employment Rights Act 1996 extends the effective termination date by adding an additional week for employees with less than two years of service. The only exception is if the employer can justify summary dismissal for gross misconduct.

Employers should also consider any prior employment with the business or a connected company. Temporary roles may count towards continuous service for statutory employment rights, and employees who transfer under a business sale will retain their previous service continuity.

What is the procedure for a short service dismissal?

To avoid claims of automatic unfair dismissal or discrimination, it is essential to follow a structured and well-documented dismissal process. Below are the key steps to ensure fairness and compliance:

1. Conduct a Thorough Investigation

Before proceeding with a dismissal, investigate any alleged misconduct or contractual breaches. Gather sufficient evidence to support your decision, ensuring a fair assessment of the situation. If necessary, you may suspend the employee while the investigation is ongoing, but they must remain on full pay until a formal decision is reached.

2. Issue a Clear and Detailed Initial Letter

Once you have gathered the necessary evidence, draft an initial letter outlining the reasons for dismissal. If the dismissal is due to misconduct, specify the breaches. If redundancy is the reason, provide clear financial or operational justifications. This letter ensures transparency and helps protect against legal challenges.

3. Hold a Formal Meeting

Arrange a meeting with the employee to discuss the dismissal before making a final decision. Allow them adequate time to prepare and be flexible in rescheduling if needed. This meeting is a crucial step in ensuring procedural fairness.

4. Communicate the Decision in Writing

After the meeting, formally notify the employee of your decision via a dismissal letter or email. Clearly outline the reason for dismissal and inform them of their right to appeal. Provide instructions on how they can initiate the appeal process.

5. Offer a Fair Appeal Process

To maintain impartiality, the appeal should be reviewed by someone who was not involved in the original dismissal decision. Additionally, ensure the employee is aware of their right to be accompanied to any appeal meetings.

By following these steps, employers can minimise legal risks while maintaining fairness and professionalism in the dismissal process.

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While dismissing a short-service employee is generally more straightforward, employers must still proceed with caution to avoid legal pitfalls. Certain claims, such as automatic unfair dismissal or discrimination, do not require a qualifying period, making it essential to follow a fair and structured process. Maintaining proper documentation and conducting a thorough assessment can help demonstrate that the dismissal is lawful and justified.

By adhering to best practices—such as investigating concerns, holding a formal meeting, and offering an appeal process—employers can protect their business while ensuring fairness in the dismissal process. A well-managed approach not only mitigates legal risks but also upholds professional and ethical workplace standards.

Managing dismissals effectively can be complex, but the right HR tools can make it easier. Book a demo with xcd today to see how it can streamline your dismissal processes, ensure compliance, and help you manage employee records effortlessly.