What is Capability Dismissal?

Capability dismissal can be a contentious issue and one that often ends up at an employment tribunal. This is because it's a rather fluid term, dependent on the performance levels of your business. 

If you need immediate advice on capability dismissal, get in touch with one of the Croner experts or phone us on 0808 501 6651. 

What is capability dismissal?

Capability dismissal is the type of dismissal that arises when an employee has capability issues when performing their job. 

This could include not having the ability, skills, and/or qualifications to complete the role they were hired to do. This includes any illnesses or disability, regardless of the reasonable adjustments put in place to help. 

To dismiss an employee for capability, two things need to be addressed. 

1. Why is the employee incapable of performing the role outlined in their job description? 
2. Why haven't steps been taken to assist them by the company? 

In essence, before you can claim capability dismissal, you need to take all the steps required to assist the employee in improving before they are considered for capability dismissal. You could, for example, put the employee on a performance improvement plan (PIP) before enacting the disciplinary procedure. 

Dismissal on the grounds of capability

You can dismiss an employee for a variety of fair reasons, with inability to fulfil the function set out in their job description being one of them, also known as capability dismissal.  

The problem can come in when you, as the employer, think they're incapable of performing the tasks required of them, whilst they feel they are performing adequately. 

If you're thinking about conducting a dismissal, here are some factors you need to consider: 

• Are there personal issues contributing to their work ethic? 

• Do they have a disability that could affect their performance? 

• Should you consider it as a conduct issue where carelessness, negligence, or lack of effort affects performance? 

• Is your staff member affected due to a lack of knowledge, skill, or ability? 

• Did you provide the employee with all the tools they need to do their job (e.g. training)? 

As a first step in any capability scenario, providing you’ve tried to handle the issue informally first, you should write a letter to them. In this, state how they've failed to meet their performance objectives. 

You should also add that you wish to conduct a meeting with them to outline steps to improve moving forward, and how you can help. 

If the problem is due to insufficient training, or a similar factor, follow your company procedure to try and assist your employee. 

Provide the staff member with the time to improve, as this constitutes relevant support, and will then allow you to re-assess their situation after the fact. If this doesn't work, and capability issues persist, you then have the right to dismiss the employee on capability grounds.  

In the event of illness

What about dismissal on grounds of capability due to ill health? 

If the employee is incapable of performing the tasks required of them because of ill health, you need to handle the situation sensitively.  

• If they have a disability, you can’t treat them less favourably based on this. 

• If an employee can't perform their duties, and you have made reasonable adjustments to remove any disadvantages, it may be fair to dismiss them. 

You should consider all options before conducting a capability dismissal on the grounds of ill health, including: 

• Getting a medical report from their GP. 

• Arranging an occupational health assessment. 

• Making reasonable adjustments if possible. 

• Allowing sufficient time to see whether their health improves. 

• Giving all available company support. 

Medical capability dismissal isn’t an unfair dismissal, but if handled incorrectly, this can lead to an unfair dismissal claim and large payouts via a tribunal. 

Unfair dismissal for capability and pay

The cap for an unfair dismissal payout in this area currently stands at £105,707 compensation cap, including a £19,290 basic award cap (or unlimited compensation for a discriminatory dismissal). 

If you handle the situation correctly, this can serve as insurance against unfair dismissal payouts and the payouts that often accompany them. If you're looking for guidance on conducting a capability dismissal, Acas has guidance on the issue. 

Speak to an expert

Dismissing an employee is never easy. If you need advice on how you should approach the situation, get in touch with one of Croner’s experts. 

Croner has a team of award-winning, HR professionals and consultants who are specialists in their field. We've been helping businesses for over 80 years, and our advice line is open 365 days a year, 24 hours a day. Why not speak to a Croner expert on 0808 501 6651? 

We also offer free, in-person events and webinars on HR and Health and Safety near you. Check out our Events page to get involved in our upcoming events.