What is Capability Dismissal?

By Matthew Reymes Cole
12 Dec 2018

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

Dismissal on the grounds of capability

You can dismiss an employee for a variety of fair reasons. Capability is one of them. The term refers to a staff member's ability to perform their required responsibilities in their current role.

You may think they're incapable of performing the tasks required of them, while 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. This is because the relevant support will then allow you to re-assess their situation. If this doesn't work, you have the right to dismiss them on capability grounds.

In the event of illness

But 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 on the basis of 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 by definition an unfair dismissal, but if handled incorrectly, this can lead to an unfair dismissal claim and large payouts.

Unfair dismissal for capability and pay

The cap for an unfair dismissal payout in this area currently stands at £98,922 (or unlimited compensation for a discriminatory dismissal).

If you handle the situation correctly, this can go some way to ensuring you won't need to make this payout. If you're looking for guidance on conducting a capability dismissal, Acas has guidance on the issue.

For in-depth, tailored advice, speak to a Croner expert. You can call us today on: 01455 858 132.

About the Author

Matthew Reymes-Cole

Matt joined Croner in 2007 as an employment law consultant and has advised clients of all sizes on all aspects of employment law. He has worked within management positions since 2017 and currently overseas a team within the litigation department, whilst continuing to support a number of clients directly.

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