Employees get their full employment law rights after two years in employment (with some exceptions to the rule).  Often an employer is mindful of this fact and will look to exit an employee who is not performing at the optimum level or for other reasons.  The advice has always been not to take this course of action too close to the two year’s service as it is well established that the effective date of termination (EDT) is extended by the statutory minimum period of notice even if you make a payment in lieu.  This can mean that an employer leaving it to the wire can get caught out.

The advice must always be of course to take action well before the two year period has expired.  Often if an employee if not performing early in the relationship is unlikely to improve unless it is a training issue.  This remains sound advice but a recent EAT decision has clarified where the employer dismisses for gross misconduct and is entitled to do so then the statutory notice period is not added onto the termination date to acquire two years service.  Of course unless the conduct complained of is so clear this does still cause a grey area but gives an employer another point to argue if the employee does not have sufficient service to bring an unfair dismissal claim as the matter will have to be dealt with as a preliminary issue.

The facts of Lancaster and Duke Ltd v Wileman are that W started her employment with LD Ltd on 22 September 2014. Although she was a competent worker, colleagues found her occasionally rude and aggressive and she had a difficult relationship with one director in particular. On 20 September 2016, LD Ltd dismissed W summarily for gross misconduct (just days before she acquired service). The employer did not follow any process or give the right of appeal as is often the case with dismissals under two years service. A preliminary point had to be decided as to whether the tribunal has jurisdiction to hear her unfair dismissal claim as her EDT was extended by the statutory notice period or not.  .

The tribunal decided that the EDT was 27th September (20th September 2016 plus one weeks statutory notice) by virtue of S.97(2) of the Employment Rights Act 1996 which states that where an employer dismisses an employee with less than the statutory minimum period of notice required by S.86 ERA, the EDT is deemed to be the date on which the statutory notice would have expired. LD Ltd appealed and the EAT allowed the appeal.

The EAT found that S.97(2) extends the EDT by ‘the notice required by S.86’. In its view, this brings the entirety of S.86 into play, including S.86(6) as much as S.86(1). S86 states that the right to statutory minimum notice ‘does not affect any right of either party to a contract of employment to treat the contract as terminable without notice by reason of the conduct of the other party’.  As such the EAT found that if W was guilty of gross misconduct there could be no extension of the EDT and as the tribunal had not made a finding on this issue, the case was remitted for the tribunal to decide whether or not W was guilty of gross misconduct as a preliminary point.

The EAT noted that this interpretation has been assumed in other cases and in leading employment law commentary texts but had not been expressly determined before.