How to Dismiss an Employee With Under 2 Years' Service
The short answer
Until 31 December 2026, most employees need 2 years' service to claim ordinary unfair dismissal. You still have to give notice, pay what you owe and avoid any reason that is unfair from day one, such as a health and safety complaint. From 1 January 2027 the 2 years becomes 6 months, so run a fair process now.
- 2 years becomes 6 months. For dismissals that take effect on or after 1 January 2027, most employees can claim unfair dismissal after 6 months.
- Some claims need no service at all. Discrimination, notice pay and automatically unfair reasons such as raising a safety issue apply from day one.
- Notice still counts. After one month's service the legal minimum is one week, and statutory notice counts towards the 6 months.
- A fair process protects you either way. A clear reason, a meeting, a chance to respond and a written decision.
You hired someone six months ago and it isn't working. They turn up late, the work needs redoing and the rest of the gang is carrying them. You want them gone, and you've heard that under 2 years "they can't do anything".
That is only half true today, and it stops being true on 1 January 2027. This guide shows how to dismiss an employee with under 2 years' service fairly. It covers what changes in January and the risks that apply from day one on site.
It is general information, not legal advice. For a specific case, call the Acas helpline on 0300 123 1100 or speak to an employment solicitor. To fix the hiring that led here, book a free strategy call.
What changes on 1 January 2027
Today, most employees need 2 years' service before they can claim ordinary unfair dismissal. The Employment Rights Act 2025 cuts that to 6 months. The change applies in England, Scotland and Wales where the employment ends on or after 1 January 2027.
Two more things change on the same day. The cap on the compensatory award is removed. And employees with 6 months' service can ask for written reasons for their dismissal.
For a building company, that means most of your current team will be protected from January. Anyone who has worked for you for 6 months, not 2 years, can claim.
What under 2 years does and doesn't protect you from
Short service only blocks one kind of claim: ordinary unfair dismissal. Everything else is open from day one.
| Claim | Service needed now | From 1 Jan 2027 |
|---|---|---|
| Ordinary unfair dismissal | 2 years | 6 months |
| Automatically unfair dismissal | None | None |
| Discrimination | None | None |
| Wrongful dismissal (notice pay) | None | None |
| Written reasons for dismissal | 2 years | 6 months |
Automatically unfair reasons include whistleblowing, pregnancy or family leave, asking for the National Minimum Wage and jury service. On site, the one that catches builders out is health and safety.
Say someone refused to work on an unsafe scaffold or reported a near miss, and you then let them go. A tribunal may decide that was the real reason. That claim needs no service at all.
Step 1: write down the real reason
The law lists five potentially fair reasons for dismissal. For most building companies it is one of the first two:
- Capability: they can't do the work to the standard the job needs.
- Conduct: lateness, no-shows, ignoring site rules or rudeness to clients.
- Redundancy: the work has gone, not the person.
- Statutory restriction: they can't legally do the job, for example they lose the licence it needs.
- Some other substantial reason: a serious business reason that doesn't fit the others.
Write down what happened, with dates. "Late 6 times in 4 weeks, two warnings by text" is a reason. "Not a team player" is not.
If no-shows are the problem, start with our same-day plan for an employee not turning up.
Step 2: check the day-one risks
Before you act, check the last few months against the day-one list. Ask yourself honestly:
- Safety: did they raise a safety concern, refuse unsafe work or report an accident?
- Pay: did they question their pay, holiday or the minimum wage?
- Family: are they pregnant, on or back from family leave, or asking for time off for a dependant?
- Discrimination: could the decision look linked to age, race, religion, disability, sex or another protected characteristic?
- Status: are they really an employee, or a labour-only subcontractor you direct like one?
If any answer is yes, take advice before you go further. The timing alone can make a fair reason look like an unfair one.
Not sure who on site counts as an employee? Our guide to employers' liability insurance for subcontractors explains how status is judged.
Not sure your team is set up the right way?
Book a free strategy call and we'll go through how you hire, contract and manage people.
Step 3: meet them and let them respond
Even with under 2 years' service, a short fair process is quicker and safer than a phone call on a Friday. From 2027 it will be expected for anyone past 6 months.
- Write to them with the problem, the facts and a time to meet.
- Hold the meeting off site or in the site office, not in front of the gang.
- Let them answer. There may be a reason you don't know about.
- Decide afterwards, not in the room.
For misconduct and poor performance, the Acas Code of Practice on disciplinary procedures sets out the steps. A tribunal can raise an award by up to 25% if an employer unreasonably ignores it.
Step 4: give notice and pay what you owe
Confirm the decision in writing, with the reason and the last day. Then pay everything that is due:
- Notice: at least one week once they've worked for you for a month, or longer if the contract says so. Pay in lieu only if the contract allows it.
- Wages: every hour worked up to the last day.
- Holiday: any holiday they've built up and not taken.
- Paperwork: a P45 and their final payslip.
Get back the van, fuel card, keys, tools and site passes on the last day. Remove their access to any job apps and shared drives.
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The 6 core systems a growing building company needs, including hiring and onboarding, with a 30-day build order. Free PDF.
Get the free guideStep 5: watch the timing around January
Statutory notice counts towards service. That matters in the last weeks of 2026.
Say an employee started on 1 May 2026. You give one week's statutory notice on 28 December 2026. Their employment ends on 4 January 2027, with about 8 months' service. The new 6-month rule applies, and they can claim ordinary unfair dismissal.
So don't treat the date as a deadline to rush a dismissal. A hurried decision without a reason or a meeting is exactly what a tribunal looks at. Make the decision for the right reasons, with a fair process, whatever the date.
Hire and run probation so you rarely need this
From 2027, the first 6 months is the window to decide. Build it into how every new starter joins:
- A written job standard: what good work, timekeeping and site behaviour look like.
- Reviews at month 1, 3 and 5: short, written, with what has to improve.
- One owner of the hire: a site lead who checks the work and keeps the notes.
- A trial on real work before you offer the job, where you can.
Our guide to hiring your first employee covers contracts and the legal steps. Short of people? See what to do when you can't find workers.
Why we care about this
Sviat Jay runs Craftex, a working London construction company, and mentors building company owners one to one. Hiring, managing and sometimes letting people go is part of running his own business, not theory.
Oleg started as a taper and jointer on £100 a day. He moved from the tools to running jobs and built a team of 10+ people. Individual results, not typical or guaranteed.
Oleg, taper & jointer: £100 a day to £7K a month profit
A 19-year-old from London who set up his own company and built a team of 10+ in two months. Individual results, not typical or guaranteed.
Every business has different strengths: one owner sells well, another runs jobs well. Sviat finds yours and builds the team around them. He aims for results in about 4 months, not the 1–3 years many coaching programs take.
Want to know where your business is weakest? Take the free 4-minute Construction Business Scorecard. Or book a free strategy call and we'll look at your team with you. If running the team is taking you off growing the business, see our fractional COO service.
Before you let someone go
- The reason is written down with dates and facts
- No safety, pay, family or discrimination issue sits behind it
- You've met them and heard their side
- Notice, wages and holiday are worked out and paid
- New starters get reviews at month 1, 3 and 5
