Why the two years’ service rule matters for employees

If you have less than two years’ continuous employment with your employer, your employer can dismiss you by giving you no more than statutory or contractual notice.

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    There are some exceptions to this rule and if you have a claim such as discrimination or a health and safety at work issue, you do not require two years’ service to make an employment tribunal claim.

    Have you worked for your employer for more than two years?

    Before you start to think about whether or not you might have a legal employment claim, there is one fundamental issue that you need to know and it is this:

    With some notable exceptions, if you have less than two years’ continuous employment with your employer, then they can dismiss you by giving you no more than statutory or contractual notice and there is nothing you can do about it.

    This is often referred to for short as ‘the two-year rule’ which term we will use here.

    With some exceptions (see below) you need two years’ service in order to claim ordinary unfair dismissal, which is the most common claim leading to settlement agreements.

    You also need two years of continuous employment to claim constructive unfair dismissal.

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    Exceptions to the two-year rule:

    There are some notable exceptions to the two-year rule, including the following:

    Discrimination

    If you’ve been discriminated against at work, then you don’t need to have worked continuously for your employer before you can bring a discrimination claim against them.

    This was particularly useful for employees who were pregnant, old or disabled during the Covid pandemic. They were the ones most likely to want to work from home in order to avoid contracting the disease and – as a result – to be discriminated against by their employer.

    Dismissal due to fears about health and safety at work

    You do not have to have any kind of health condition or to have served two years with your employer in order to claim for ‘automatically unfair dismissal’ under section 100 of the Employment Rights Act 1996.

    You would be automatically unfairly dismissed if, for example, you were dismissed because you refused to attend your workplace since you felt it was an imminent threat or a serious danger to your health and safety.

    Our guide on unfair dismissal tells you more about automatically unfair dismissal.

    Pay cuts or other penalties related to health and safety issues at work

    Similarly, you may suffer so-called ‘detriments’ (or penalties/punishments) such as pay cuts or bullying, for refusing to attend, or for deciding to leave, what you consider to be an unsafe workplace.

    In such circumstances, you again don’t need two years’ service to bring a claim to an employment tribunal under section 44 of the Employment Rights Act 1996.

    Our article on unfair dismissal, pay cuts, bullying and health and safety issues at work explains in more detail the above health and safety issues and practical implications of sections 44 and 100 of the Employment Rights Act 1996.

     

    Other instances where the two-year rule doesn’t always apply

    Monaco Solicitors have negotiated very high-value settlements for people with less than two years’ service who don’t fall into any of the above exception categories. They tend to be in cases where:

    1. The employee is very well paid and the company wants to ‘do the right thing’ for them. This latter scenario usually means that the employer doesn’t want to get a reputation in their field for treating highly-paid employees poorly, which will make it difficult for them to attract the best talent in the future.
    2. The employee is employed in a commercially sensitive position and the company is willing to pay well for them to enter into a settlement agreement that includes post-termination restrictions on their work-related activities.

     

    What can you do if you have less than two years of service?

    With the above important exceptions, the two-year rule means that if you have less than two years’ service and are facing any of the scenarios outlined elsewhere on this website, or if you have simply been dismissed, there is often very little that you or we can do about it.

     

    Can you still negotiate a settlement agreement without two years of service?

    Having said that, there will always be other scenarios where a settlement agreement and a severance package – complete with ex gratia payment – will be achievable.

    But whilst we are optimists, we are also realistic and our experience suggests that, if you don’t have two years’ service or don’t fall into any of the above exception categories, the chances of your achieving a settlement are not very good.

     

    Next Steps

    Monaco Solicitors are specialist employment lawyers who only represent employees. Our team of experienced senior employment solicitors has particular expertise in negotiating settlement agreements for employees. 

    We can most likely help you to negotiate a settlement agreement if you have been in your present employment for more than two years and have a valid legal case with supporting evidence. It’s possible that we could help you even if you’ve been employed for less than two years.

    If you’d like to find out if we can assist you with your case, or if you’re not sure whether or not you are entitled to a settlement payment, do get in touch:

    • via this link
    • by phone: 020 7717 5259
    • by email: communications@monacosolicitors.co.uk