Should I give a reason for dismissal to an employee who has less than 2 years’ employment?

All employees have what are termed “Day 1 rights”, which are those which protect the employee and require no qualifying period of employment. Examples of these are, amongst others, the right not to be discriminated against or harassed. These serve to protect an employee, or prospective employee, from such unwanted conduct.

There are other rights an employee has, but which require that they have a continuous period of employment to qualify. The most common example is the right to make an Unfair Dismissal claim to the Employment Tribunal (“ET”), which relates to the manner and reason for dismissal. This currently requires that an employee has a minimum of 2 years’ employment with their employer to do so. The scope of this note relates to “ordinary” Unfair Dismissal claims, and does not address the issue of “automatic” Unfair Dismissal claims, for which statute has prescribed 7 circumstances in which such a claim may be made. Examples of automatic Unfair Dismissal are the right not to be dismissed for whistleblowing or for being pregnant or on maternity leave. These are also “Day 1 rights”.

Currently, because of the 2 year rule, the law effectively allows an employer to dismiss an employee unfairly if the employee does not have such a qualifying period, as the employee has no recourse to the ET to dispute the dismissal or seek remedy. Accordingly, an employer is protected from such claims, but practically, how should it handle a dismissal in circumstances in which the employee has no remedy?

Legally, an employer does not need to provide a reason for dismissal to an employee who does not have the 2 years’ employment unless they are pregnant or on statutory maternity or adoption leave. However, it would be expected that an employee would want to know the reason for their dismissal, and it may appear callous not to provide one. Practically, not providing one might encourage the dismissed employee to make a claim for which they do not require a qualifying period, such as discrimination, regardless of the merit of such a claim.  As costs are rarely awarded to either the winning or losing party in an ET, defending the claim will cost the employer time, uncertainty and money, all of which it would prefer to avoid.

Of course, the most appropriate solution is to provide the employee with the factual reason for dismissal, but there are circumstances in which an employer might be reluctant to do so.

If the employee is to be dismissed for redundancy, and the reason is genuine, it is generally relatively easy for an employer to show the employee that their role is no longer required, as it is usually a reflection of the financial or market position of the employer. Although any dismissal is rarely welcomed by an employee, at least a dismissal for this reason often comes without the stigma of “incompetence”.

But what should an employer do if it wishes to dismiss an employee with less than 2 years’ employment for “performance” reasons? It is entitled to do so. It is protected from any Unfair Dismissal claim in relation to that. It may be tempting for an employer to either provide no reason to the employee, or, if the personal relationship between the parties is warm, seek to categorise it as “redundancy” in an effort to avoid the feeling of hurt which a dismissal for “performance” often brings to the dismissed. By softening the blow, it is likely that this will reduce the possibility that another, Day 1 claim, is made against the employer.

A word of warning to employers. While the possibility of another, Day 1 claim being made by the dismissed employee is reduced in those circumstances, if one is subsequently made and it becomes clear in the ET hearing that the real reason for dismissal was not “redundancy”, it will show that the employer misrepresented the real reason for dismissal. It then becomes easier for an ET to accept the claimant’s argument that dismissal was for another reason – which may make the unmeritorious Day 1 claim more likely to succeed.

The answer to the question of “which reason should an employer give to a dismissed employee with less than 2 years’ service?” is not a “one size fits all”. An employer will take a view on the likelihood of a claim being made against it, and will also no doubt be informed by the relationship with the soon-to-be-dismissed employee. But it is worth bearing in mind the possibility that if it does try to “let the employee down gently”, it may have to defend a non-credible reason for dismissal in the ET, which increases the prospect of the Day 1 claim against it being successful.

Meaby & Co are lawyers experienced in all aspects of employment issues. Should you require advice on any aspect of employment law, including the above, please contact Chris Marshall on 0207 703 5034 or 07866 453679.