The recent case of Lancaster & Duke v. Wileman is a useful reminder to employers that terminating an employee’s employment in the week before they gain two years’ continuous service may still enable an employee to claim that they have the requisite qualifying service to bring a claim for ordinary unfair dismissal.
To bring a claim for ordinary unfair dismissal, an employee generally needs to have at least two years’ continuous service on the date that their employment is terminated – this is known as the effective date of termination (EDT). However, the EDT can be extended in certain circumstances, meaning that an employee terminated in the week prior to their two-year anniversary may still gain unfair dismissal protection.
The EDT will, in most circumstances, be extended by the statutory minimum notice period if an employer terminates an employee’s employment without having given prior notice or if the employer makes a payment in lieu of notice. This means that, for example, an employee who is terminated (without prior notice) four days before they reach two years’ service, but who received a payment in lieu of notice, will have their EDT extended by one week (the statutory minimum notice period) so that they qualify for ordinary unfair dismissal protection. The EDT does not need to be extended by the contractual notice period.
However, the case of Lancaster & Duke v. Wileman confirmed an exception to the above rule, which is that if an employee is lawfully dismissed for gross misconduct without notice or payment in lieu of notice then the statutory notice period does not need to be added to the EDT. This means that an employee dismissed for gross misconduct in the week prior to the two-year anniversary of their start date will not gain unfair dismissal protection provided that the employee has genuinely been guilty of gross misconduct. If an Employment Tribunal finds that it was not gross misconduct, the statutory minimum notice period would then be added to the EDT.
Employers should look carefully at time frames if they are terminating an employee prior to the two-year anniversary of their start date.