Why first in can be last out

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A new role can leave you exposed when redundancies are in the offing.

Moving jobs is an exciting prospect, especially if you've been with the same bank for years, but this can weaken your legal rights to employment protection.

Long-term employees have all the rights

Employees who've worked for the same employer for more than a year have the right to claim either unfair or constructive dismissal if they're dismissed unfairly. Unfair dismissal occurs when your employer has either not followed a fair dismissal process, or there is no fair reason for dismissal (such as redundancy or capability). And constructive dismissal can be claimed if you're forced to resign following an employer's breach of contract.

As a result, employers need to tread very carefully when they are dismissing long-term employees. They must follow a minimum statutory dismissal procedure and the dismissal must be for a fair reason.

New employees are more exposed

However, once you shift out of a protected employment position which you've held for more than 12 months, a new employer can dismiss you in the first year without fear of a claim.

That fear isn't absent entirely - claims can still be brought for any form of discrimination (race, sex, or otherwise); and you will be able to claim unfair or constructive dismissal as described above.

In the financial services industry, which has a reputation for making large scale redundancies when there is a market downturn, the 'one year rule' throws up interesting possibilities. Why would an employer want to take the chance of dismissing a long-term employee who can kick up a fuss, when they can dismiss a recent hire who has no standing to bring a claim? The incentive may be just too great.

Couple this with the fact that if you're dismissed in the first year, you're also not entitled to a statutory redundancy payment (you need two years' employment for this) and the resulting impact on a new hire can be significant indeed.

How long before you prove your worth?

This isn't to say there wouldn't need to be a proper redundancy selection process - but it can be engineered so that length of service may be the determining criterion (although it is not always good practice to so). And even if performance and skills become the criteria for selection, it's typically harder to prove your worth in a company that you've only just joined.

You will always have a right of appeal, even if you are dismissed in the first year. Most appeals are, however, regrettably not upheld and you are going to have difficulty justifying your position with such a short period of employment under your belt.

Philip Landau is a partner at London law firm Landau, Zeffertt Weir. Feel free to contact him at pl@lzwlaw.co.uk or on 020 7357 9494 for a free consultation on this or any other employment law issue.

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