Case Study:
When is a year not a year?

What difference can a month?s notice make when defining the first year of an employee?s time with the company?

Tom is one of ABC Ltd?s salesmen. He is a poor performer with an attitude to match. The company has put off dealing with him but his performance and attitude are affecting the sales team. The Sales Director happened to mention the problem to the company?s solicitor at the golf club last night and the solicitor advised that it is possible to get rid of employees with less than a year?s service with no risk of an unfair dismissal claim. On checking Tom?s file the Director notes that he started on 4th Oct 2003. It is now 25th September 2004. Is it safe to dismiss him? Would it make a difference if his contract provided for a month?s notice?

Answer:

The answer here revolves around the question of the effective date of termination (?the EDT?) of Tom?s contract. Where notice is given, the EDT is the date on which notice expires. Where however no notice is given, the EDT is the actual date of termination. However, in unfair dismissal cases, in calculating someone?s length of service, the EDT is artificially extended by the statutory minimum notice period (regardless of the actual notice period in the contract). In this case, Tom has been employed for less than a year and so the statutory notice period is one week. If he is dismissed on 25th Sept, the statutory notice period takes his service to 2nd Oct. As 3rd Oct is the date on which Tom will have a year?s service, he cannot claim unfair dismissal.

Note that where the dismissal is (genuinely) for gross misconduct, no statutory notice period is added to the length of service.

Note also that although an employee must have one year?s service in order to claim unfair dismissal, there are an increasingly large category of claims where there is no service length requirement, e.g. dismissals connected with unlawful discrimination (sex, race, disability, sexual orientation and religion), dismissals for health and safety or trade union reasons, dismissals for asserting a statutory right (e.g. to minimum wage, rights under the Working Time Regulations etc.).

Finally, note that, although Tom may not be able to claim unfair dismissal, if he has contract that provides for a contractual discipline or performance procedure to be followed prior to dismissal, he may be able to claim breach of contract if this policy is not followed.