How to Handle Short Service Dismissals

Short service dismissal is one of the most commonly misunderstood areas of employment law. Many employers believe that employees with less than two years’ service can be dismissed instantly and without due process, but this is an urban myth.

While the law does allow for a simplified process, there are still critical legal protections employers must understand to avoid unfair dismissal claims and stay compliant.

In this guide, employment law specialist Catherine Wilson explains what short service dismissal means, when it applies, and how to carry it out lawfully.

Jump to a section:

• • What is a short service dismissal?
  • Can you dismiss short-serving employees without process?
  • How to calculate employment length
  • Legal risks to avoid
  • How to carry out a short service dismissal
  • Probation period dismissals
  • Upcoming changes
  • How to draft a short service dismissal letter
  • Frequently asked questions

What Is a Short Service Dismissal?

A short service dismissal refers to the dismissal of an employee before they reach two years of continuous service with the same employer.

This matters because the right to claim statutory unfair dismissal usually only applies once an employee has been employed for two years less one week (23 months and 3 weeks).

However, employees still retain certain legal protections from day one — and failing to follow the correct procedure can expose your business to costly tribunal claims.

Can You Dismiss Short-Serving Employees Without Process?

No. While short-service employees don’t usually have the right to claim ordinary unfair dismissal, they can still claim automatic unfair dismissal or discrimination if the dismissal is linked to certain protected reasons.

There are more than 30 grounds on which a dismissal can be automatically unfair, including:

• • Pregnancy or maternity leave
  • Asserting statutory rights (e.g. requesting annual leave or National Minimum Wage)
  • Whistleblowing or raising health and safety concerns
  • Discrimination based on a protected characteristic such as age, sex, race, disability, or religion

These protections apply from the first day of employment, so it’s essential to follow a fair and transparent process, even for short-service dismissals.

You can learn more about what constitutes unfair dismissal and how to reduce the risk of claims in our guide to unfair dismissal and employee rights.

Calculating Employment Length Correctly

Accurately working out an employee’s length of service is a crucial first step in the dismissal process. This calculation determines whether they qualify for full unfair dismissal rights and helps you decide the safest approach. Miscalculating even by a few days could mean they’re entitled to extra protections, so it’s worth getting this right from the start.

• • Count both the first and last day of employment.
  • If notice is given close to the two-year mark, be aware that Section 97 of the Employment Rights Act 1996 can extend the employee’s service by an additional week, potentially giving them unfair dismissal rights.
  • Consider any previous continuous service with your business or a linked company, including temporary roles or TUPE transfers.

Legal Risks to Avoid

Short service dismissals may appear simple, but they’re not without risk. Employers who skip key steps or overlook certain obligations can still find themselves facing legal action. Here are some of the most common mistakes to avoid:

• • Insufficient notice: Even short-serving employees are entitled to contractual or statutory notice (or payment in lieu).
  • Hidden unfair reasons: If the real reason for dismissal isn’t documented (e.g. redundancy without evidence), a tribunal may rule the dismissal was automatically unfair.
  • Failure to follow procedure: Even a brief, fair process can protect your business by demonstrating that the dismissal was not linked to a protected reason.

Probation Period Dismissals: Best Practice for Employers

For most organisations, the probation period (usually lasting three to six months) is the first opportunity to assess whether a new hire is a good fit for the role and the business. Because this period typically falls within the short service dismissal timeframe, many employers assume it’s straightforward to terminate employment if things don’t work out.

While dismissals during probation are common, they are not automatically risk-free. All the same legal considerations around automatically unfair dismissal, discrimination, and contractual rights still apply from the employee’s first day of employment. This means a poorly handled probation dismissal can still result in a tribunal claim.

A well-structured and documented probation process is the best way to protect your business and demonstrate that any decision to dismiss was fair, reasonable and legally compliant. Employers should aim to include the following steps:

1. Set Clear Expectations from the Start

Provide the employee with a written outline of performance standards, behavioural expectations, and any specific objectives they need to achieve during their probation. This clarity helps avoid disputes about what was expected.

2. Conduct Regular Check-Ins

Schedule regular reviews (typically monthly) to discuss progress, address issues early, and provide support or training where needed. Keep written records of these meetings to show you’ve offered the employee a fair chance to succeed.

3. Give Documented Feedback

Be specific about any concerns and document all feedback in writing. This evidence is invaluable if you later need to justify the dismissal decision.

4. Communicate the Outcome Clearly

If the employee fails to meet expectations, issue a formal written notice of dismissal in line with their contractual or statutory notice period. You may also consider extending the probation period if you believe improvement is possible.

For further detail on what’s legally required when dismissing an employee during probation, see this practical guide.

Upcoming Changes for Short Service Dismissal (2025 & Beyond)

The Government’s proposed Employment Rights Bill (currently working its way through Parliament) could reshape dismissal rights significantly. Among the most transformative changes:

• • The two-year qualifying period for ordinary unfair dismissal would be abolished, giving employees protection from day one of employment.
  • To give employers breathing room, a statutory “initial period of employment” (likely 6–9 months) is proposed, with a lighter-touch dismissal regime during that time.
  • These reforms are expected to come into force only from Autumn 2026 (or later), and many operational details are still subject to consultation and refinement.

Because the law is evolving, employers should keep a close eye on updates and be ready to review dismissal and probation policies accordingly.

Drafting a Short Service Dismissal Letter

Once a decision has been made, it’s important to confirm it in writing. A dismissal letter is a formal record of the decision and helps protect your business if the employee later challenges the outcome. While there’s no single legally required format, getting the content and tone right is essential to demonstrate fairness and compliance.

A well-drafted short service dismissal letter should include:

• • Reason for dismissal: Clearly and factually explain why employment is ending (e.g. performance issues, redundancy, or conduct).
  • Final date of employment: Confirm the employee’s last working day and any notice period, or explain if payment in lieu of notice will be made.
  • Outstanding entitlements: Outline any payments due, such as unused holiday entitlement or final salary.
  • Appeal process: If your policy allows for appeals, provide clear instructions on how the employee can submit one and the timeframe for doing so.
  • Return of company property: Set out any expectations for returning items like keys, devices, or documents.

While it’s possible to draft this yourself, the language used in dismissal documentation can have significant legal implications. Ambiguous wording, incorrect dates, or poorly stated reasons can all weaken your defence if a claim is brought later.

Frequently Asked Questions