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Employment Rights: Does the two-year rule always apply? 

Since 6 April 2012, new employees are required to have 2 years continuous service before they acquire full employment rights. This is known as ‘the qualifying period’ and, prior to 6 April 2020, the requirement was just 1 year. 

Whilst most employers will be aware of the qualifying period, some are unaware of the various claims to which the two-year rule does not apply. Given the rise in employment claims, it is vitally important for employers to be aware of the claims that an employee can bring during the first 2 years of their employment.   

Breach of Contract (Wrongful Dismissal)

Either party to a contract can make a claim for breach of contract at any point after the contract is formed; this is regardless of the length of service. Typical breaches of contract include the failure to pay wages or the failure to provide notice in accordance with the terms of the contract. In such situations, an employee has the right to bring a claim for breach of contract. 

A further example of breach of contract by an employer, is the failure to agree changes to an employment contract. An employee can bring a claim if their employer makes changes to their duties, pay or place of work without their consent. If the change results in this employee losing out financially then they can recover compensation for this loss. 

An employer should also bear in mind that ancillary documents such as the disciplinary and grievance procedures often form part of the contract. As such, any failure to follow such procedures, can result in a breach of contract clam. 

Automatically Unfair Dismissal

Most employers will probably be aware that the qualifying service requirements for unfair dismissal is generally 2 years, as contained in the Employment Rights Act 1996.  However, some employers wrongly assume that this applies to all claims for unfair dismissal, which is not strictly the case. Some dismissals are automatically unfair and, for these, there is no 2-year service requirement. The following are automatically unfair reasons for dismissal. 

  • pregnancy, including all reasons relating to maternity;
  • family, including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants;
  • acting as an employee representative;
  • acting as a trade union representative;
  • acting as an occupational pension scheme trustee;
  • joining or not joining a trade union;
  • being a part-time or fixed-term employee;
  • pay and working hours, including the Working Time Regulations, annual leave and the National Minimum Wage; and
  • whistleblowing.

Whistleblowing

A whistleblower is someone who reports certain types of wrongdoing. A whistleblower is protected by law from being treated less favourably or from losing their job. If an employer dismisses an individual due to whistleblowing or treats them less favourably then the employee can pursue a claim via the tribunal; this is irrespective of their length of service.   

Discrimination claims

The Equality Act 2010 protects employees from being discriminated against as a result of a protected characteristic. Under the Act, there is no requirement for a qualifying period of employment and both applicants and employees can bring a claim. As a result, employers should have due regard to their recruitment process and ensure they, and other managers, are familiar with the Equality Act and associated legislation, so as to avoid potential claims. 

It follows from the above, that employers should not merely assume that they can safely dismiss employees with less than 2 years qualifying service. Whilst these employees have fewer employment rights, the 2-year rule does not provide complete protection. 

If you have any questions relating to this post or require any legal advice regarding dismissal, then please contact the legal team at enquiries at Monarchsolicitors.com or on 0161 820 8888.

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