Dismissals of employees with less than one year service

As all employers should be aware, the 3-step statutory dismissal procedure must be followed in order to fairly dismiss an employee.  If this is not complied with in full, the dismissal will be automatically unfair and any compensation awarded to the employee can be increased by up to 50%.

Since the statutory procedures came into force in 2004, there has been some uncertainty as to whether they must be followed during an employee’s first year of employment, before the employee obtains unfair dismissal rights.  This issue was considered by the Employment Appeal Tribunal in Scott-Davies v Redgate Medical Services (UKEAT/0273/06). 

Mr Scott-Davies was dismissed during his first year of employment, without any procedures being followed.  Although he lacked the requisite one-year qualifying service for claiming unfair dismissal, Mr Scott-Davies argued that he was entitled to bring a claim for breach of the statutory 3-step disciplinary and dismissal procedure.  The EAT upheld the tribunal's decision to strike out his claim on the basis that there is no free-standing right for employees to complain of a breach of the statutory procedures.   

This decision is plainly correct and provides employers with certainty that they are entitled to dismiss employees during their first year of employment without following the normal disciplinary procedures.  However, employers should be aware that if an employee has another potential claim, such as for discrimination or breach of contract, any failure to follow the minimum statutory procedures when dismissing the employee could result in an uplift in any award of compensation to the employee by as much as 50%.  Employers should therefore exercise a degree of caution when carrying out all dismissals, including those in respect of employees with less than one year’s service.