Offered a settlement agreement with under 2 years' service? What you can still claim and what it should still contain
"You don't have 2 years, so you have no claim" is the opening line of many of these conversations, and it is often only half true. It is worth checking which half applies to you before you accept it.
Does 2 years' service actually matter here?
Yes, for one specific claim: ordinary unfair dismissal under section 108 of the Employment Rights Act 1996 needs 2 years' continuous service. It does not touch notice pay, accrued holiday, contractual entitlements, or the group of claims, including discrimination and whistleblowing, that carry no minimum service at all.
Claim by claim: what needs 2 years and what does not
| Claim | Minimum service | Cap | Time limit |
|---|---|---|---|
| Ordinary unfair dismissal The default employer argument with under 2 years: usually correct on its own. | 2 years | £123,543 compensatory award (plus a basic award) | 3 months less one day |
| Automatically unfair reasons (e.g. asserting a statutory right, health and safety, whistleblowing-related dismissal) ERA 1996 ss.99, 100, 103A and 104 each remove the qualifying period for their specific reason. | None | Same cap as ordinary unfair dismissal, no minimum service required to bring it | 3 months less one day |
| Discrimination (Equality Act 2010) Protected characteristics only: age, disability, sex, race, religion or belief, sexual orientation, and others in EqA 2010 s.4. | None | No cap | 3 months less one day |
| Whistleblowing (protected disclosure) ERA 1996 s.103A. The disclosure itself must qualify; not every complaint does. | None | No cap | 3 months less one day |
| Statutory or contractual notice pay ERA 1996 s.86. A day-one entitlement, not a claim that needs 2 years to exist. | None (1 month gets you 1 week statutory minimum) | No cap: your notice period or pay in lieu | 6 years (breach of contract, ordinary courts) or 3 months less one day (tribunal) |
| Accrued but untaken holiday pay Working Time Regulations 1998. Runs from day one, pro-rated to your leave year. | None | No cap: the pay for the days accrued | 3 months less one day |
| Wrongful dismissal / breach of contract A contract claim, not a statutory unfair dismissal claim, so the 2-year rule does not touch it. | None | No cap (tribunal breach-of-contract claims are capped at £25,000; ordinary courts are not) | 6 years (courts) or 3 months less one day (tribunal, up to £25,000) |
Tribunal time limits are currently 3 months less one day from the effective date of termination (or the relevant act complained of), and the pending Employment Rights Act 2025 changes may extend this once in force; check the current position before relying on a date.
The 2-year qualifying period, and the change coming under the ERA 2025
The 2-year qualifying period for ordinary unfair dismissal (ERA 1996 s.108(1), raised from one year to two by SI 2012/989; the automatically unfair reasons carved out by s.108(3) need no qualifying period) is the current law. The Employment Rights Act 2025 provides for this to change, but the commencement date and the detail of the new regime are not yet settled at the point of writing. Do not rely on a shorter qualifying period being in force for your dismissal date without checking; this page will be updated once the position is confirmed.
Probation and other short-service groups
Being on probation, or in your first weeks or months of a job, is not a separate legal category. Your rights follow your actual length of continuous service, calculated from your start date, not from the end of a probation period. A probationary dismissal for an automatically unfair reason, or one that amounts to discrimination, carries exactly the same protection as it would for a colleague with 10 years' service.
Constructive dismissal with under 2 years' service
Resigning in response to your employer's fundamental breach of contract is treated as a dismissal for unfair dismissal purposes, so it needs the same 2 years' service as any other ordinary unfair dismissal claim (ERA 1996 s.95(1)(c) and s.108). The same escape routes apply: if the breach connects to whistleblowing, a protected characteristic, or another automatically unfair reason, the claim does not need any minimum service, though you still need to show the breach itself and that you resigned promptly in response to it.
What a settlement agreement should contain in this situation
Split every item into what you are owed regardless of any negotiation, and what is genuinely up for discussion. Short service changes the leverage available; it does not remove the day-one entitlements.
Owed anyway
- Statutory or contractual notice pay.
- Accrued but untaken holiday pay.
- Any contractual benefit or bonus that has already vested.
- Wages already earned and unpaid.
Negotiable
- An ex-gratia sum reflecting an automatically unfair, discrimination or whistleblowing angle, where one genuinely exists.
- The wording of your reference.
- Confidentiality and non-derogatory terms.
- A contribution to legal fees beyond the standard fixed sum, where your employer agrees to it.
When "you have no claim" is the wrong answer
An employer relying on short service to justify a low or nil offer is only right if none of the no-minimum-service claims apply. Whistleblowing, discrimination, and the automatically unfair reasons each survive short service entirely, and a genuine one of these changes the value of a settlement considerably. It is worth having the real reason for your dismissal checked against these categories before you accept that short service settles the question.
Frequently asked questions
Can you claim unfair dismissal with under 2 years of service?
Not the ordinary form: ERA 1996 s.108 sets a 2-year qualifying period for that claim. But several dismissal reasons remove the qualifying period entirely, including whistleblowing, asserting a statutory right, and health and safety reasons, and discrimination claims under the Equality Act carry no minimum service at all. Which route applies depends on the real reason you were let go.
What can I claim with less than 2 years of service?
You keep your notice pay, accrued holiday pay, and any contractual entitlements regardless of service length. If the dismissal falls under an automatically unfair reason, or amounts to discrimination or a protected disclosure, those claims have no minimum service requirement and no compensation cap (other than notice and holiday, which are simply paid in full).
Does constructive dismissal need 2 years of service?
Constructive dismissal, resigning in response to a fundamental breach by your employer, is treated as a dismissal for unfair dismissal purposes, so the same 2-year qualifying period applies to the ordinary claim. The same exceptions apply too: if the breach connects to whistleblowing, a protected characteristic, or another automatically unfair reason, the qualifying period does not apply.
I am still on probation. Does that change anything?
Probation is a contractual stage, not a separate legal status: your statutory rights are the same as anyone else at that length of service. Being on probation does not itself remove any protection, and it does not itself create one either. What matters is your total continuous service and, if you are dismissed, the real reason for it.
Disclaimer
This guide provides general information only and is not legal, tax or benefits advice. Your position depends on the specific facts of your case. For advice on your own circumstances, speak to a qualified adviser. Law as at 26 August 2026; this page is due for review by the earlier of 6 April 2027 and the commencement date of any relevant Employment Rights Act 2025 provision.
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