Generally an employee must have the necessary continuous service before they can bring a claim for unfair dismissal. Employees who have 2 years' continuous service (or 1 year's continuous service for employees in Northern Ireland) will be entitled to pursue a claim for unfair dismissal. The exception to that general rule is if their claim relates to one of the following:
Claiming damages for breach of the terms of an employment contract
The right to claim unfair dismissal does not apply to certain excluded groups. An employee is barred from bringing a claim if they:
If an employee is dismissed in breach of their contractual notice period, they may claim damages amounting to the wages the employee would have earned during the notice period.
The effective date of termination means that:
Usually there is no difficulty in calculating the effective date of termination and, in most cases, it is the last day on which your employee worked for you.
If you dismiss an employee without notice, but still pay them their wages for the notice period (called payment in lieu of notice), the effective date of termination is still the date your employee was told to go. In the case of constructive dismissal, the effective date of termination is the date of your employee's departure.
In certain circumstances, the effective date of termination can be extended. The purpose of this rule is to ensure that an employee is not deprived of their statutory rights by wrongfully dismissing them without notice just before they reach the qualifying period to present a claim.
A typical example of an extension of the effective date of termination is where an employee is employed continuously in England, Wales or Scotland for more than one month but less than two years, and is then wrongfully dismissed without notice a couple of days before completion of their two-year period of employment. The employee would be entitled to one week's statutory minimum notice.
In this particular case the effective date of termination can be extended by one week which gives the employee the necessary two years' continuous employment to present an unfair dismissal claim to an employment tribunal.
An extension of the effective date of termination can similarly be utilised to ensure that an employee will have the necessary two years' continuous service to claim a statutory redundancy payment.
The period of employment must be continuous. If the employment period is broken so that it is not continuous with a later period, a new period of employment will commence after the break, starting again at week one. The old period cannot be added to the new.
Weeks during which an employee is not employed under a contract of employment do not count as part of their continuous employment, except in the following circumstances:
If there is a contract of employment, the question of continuity of employment is not an issue as there is a continuing contract and continuity of employment will be preserved, even though the employee may not work as a result of sickness or holiday.
Industrial action does not break continuity of employment, but days during which an employee may be on strike or locked out by the employer do not count in computing the length of employment.
If an employee is made redundant and is due to start another job (under a new employment contract) with the same employer then continuity of employment will be preserved so long as they start their new job within four weeks of the effective date of termination of their previous employment contract.
For employment to be continuous, the employee must be with the same employer. If there is a change in employer, continuity will be broken in most cases. Although a change of employer breaks continuity, a change in job with the same employer will not break it.
There are circumstances, however, where continuity of employment will be preserved despite a change of employer. For example, where an employer has died, his or her personal representatives (e.g. executors) will take control of the deceased employer's estate including the business. If the personal representatives agree to continue to employ the employee then continuity of employment is preserved. Another example would be where there is a change of partners; again there is no break in continuity.
An employee who resigns (and has the required continuity of service) can still bring a claim for unfair dismissal and be awarded compensation if they can show that they were 'constructively dismissed', i.e. that the employer's conduct fundamentally breached their contract of employment. This includes breaching the implied duty of trust and confidence. You must therefore treat all employees fairly and consistently. Examples of actions that could amount to constructive dismissal include if you were to:
Please note that the above list is not intended to be exhaustive, merely to illustrate those areas where a problem may arise.