What is the two-year rule for employment rights?

Many employees don’t realise that, unless they have two years of continuous service with their employer, they do not have full employment rights.

This ‘qualifying period’ has been in force since 2012 and applies to various areas of employment law, including unfair dismissal claims.

In this blog, our employment law solicitors look at the two-year rule for employees in more detail.

Does the two-year rule apply to all employment rights?

No. Some employment rights apply from day one (more on this below) of employment, however, there are some important rights that are only available to employees after two years of service:

Unfair dismissal

Employees need to have two years of continuous service with the same employer to be eligible to claim unfair dismissal.

Unfair dismissal includes being dismissed for no ‘fair’ reason or where the reason was not justified. It also applies where the employer has not followed a fair procedure using the ACAS Code of Practice.

The two-year rule does not, however, apply where the dismissal is automatically unfair. Automatic unfair dismissal reasons include:

• Taking time off for family reasons, e.g. maternity, adoption, parental or paternity leave, or for dependants
• Whistleblowing
• Making a flexible working request
• Raising a breach of the National Minimum Wage
• Raising a concern relating to health and safety
• Doing jury service
• Being a trade union member or representative

Statutory redundancy

If an employee is made redundant, they will only be eligible for statutory redundancy pay after two years of service. The amount is calculated based on age, pay and length of service and can be calculated using the online calculator. Some employers offer redundancy payment in ‘good faith’ for employees with less than two years of service but there is no legal requirement to do so.

Written reasons for dismissal

This may come as a surprise to some: it is only after two years of continued service that employees have the right to request written reasons for their dismissal. This does not apply if the reason for their dismissal is related to pregnancy or family leave (see below).

What rights do employees have under two years?

There are some ‘day one’ rights that all employees are entitled to, no matter how long they have been employed. These include:

• Equality and discrimination rights under the Equality Act 2010
• Pay: the right to receive at least the minimum wage, an itemised payslip, to be paid for untaken statutory annual leave on termination of their employment and not to have unauthorised deductions from their pay
• Paid annual leave
• Statutory sick pay (if they pay National insurance and have been off work for four consecutive days)
• Maternity, paternity and adoption leave
• The right to be offered a settlement agreement
• Reasonable working hours
• The right to belong to a trade union
• Protection under the Health and Safety at Work Act 1974
• The right to be accompanied by a colleague or trade union representative at any formal hearing relating to disciplinaries or grievances
• Protection from making a protected disclosure (whistleblowing)
• Claims for automatic unfair dismissal, e.g. reasons relating to maternity or in connection with a flexible working application (see above for more detail)

Discrimination

If you were dismissed because of a protected characteristic (age, disability, gender reassignment, marriage/civil partnership, pregnancy and maternity, race, religion or belief, sex, or sexual orientation), such a claim does not require two years’ service.

Wrongful dismissal

A wrongful dismissal is when an employer has breached an employee’s contract. It’s usually to do with notice or notice pay. If an employee wants to claim wrongful dismissal, they do not require two years’ service to do so.

A word of caution for employers

It is important for employers to remember that the two-year rule does not provide a loophole for dismissing an employee without good reason. There are dozens of circumstances where an employee can claim automatic unfair dismissal, or where a worker thinks they have been unfairly dismissed or mistreated due to their protected characteristics which could lead to an additional unlawful discrimination claim.

Identifying a fair reason and following a fair procedure when dismissing workers is undoubtedly advisable; it reduces the risk of an employee filing a claim against you and provides the opportunity to address issues and make necessary changes to help avoid them happening again.

Get in touch with our employment solicitors in Bristol

If you have been unfairly dismissed, it is important to seek legal advice as soon as possible. Our expert employment lawyers can advise you on your employment rights and what to do next. Call us on 0117 325 2929 or fill out our online enquiry form.