Dismissal Due to Capability

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Peninsula Group, HR and Health & Safety Experts

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If your employee has a great attitude but still can’t complete their work, it may be a capability issue. Read more to ensure you dismiss them legally and fairly.

Sometimes an employee is incapable of doing their job to the required standard. This may be because they don't have the right skills or aptitude for the job.

This can feel more complicated than someone who has the capability but is having issues because of conduct. A dismissal here is often simpler. You simply deal with the issue as you would misconduct and follow disciplinary procedures.

This guidance looks at dismissal due to capability. It follows a different procedure than one because of conduct. If you don’t follow the correct procedure, you can be a victim of unfair dismissal claims.

Read more to find out how to determine if it’s a capability issue and how to legally carry out a dismissal due to capability in the UK.

What is capability dismissal?

This dismissal relates to a situation where staff are unable to conduct their role to the necessary standard.

There are five fair reasons to dismiss an employee, they are:

  1. Misconduct.
  2. Redundancy.
  3. Illegality.
  4. Capability.
  5. And other substantial reasons.

Capability is one of the fair reasons, meaning you can consider terminating an employee based on this. Capability dismissal in the UK can arise in three situations:

  • Capability dismissal due to ill health
  • Dismissal because of the ability to do the job.
  • Dismissal because of inadequate qualifications.

What is capability?

Capability is classed as anything related to an employee's skill, aptitude, health, or any other physical/mental quality.

You can dismiss an employee if they can’t do the job you employed them to do. Even if they can still do some of their duties, that doesn’t mean that a tribunal will find their dismissal unfair.

Even if the employee is good at their job, you can still dismiss them on grounds of capability if they are so uncooperative, they can’t get along with clients

Establishing capability as the reason for dismissal

As an employer, it is important to ensure that there is a consistent approach to the management of capability at work.

The primary aim regarding capability issues is to ensure that, wherever possible, standards of work are reaching the performance levels required of the employee.

All concerns about capability should be logged in their personnel records and communicated to the employee as soon as possible.

You should assess capability at work by measuring the employee’s skills, abilities, and performance against clear standards and expectations. You must have communicated these expected standards of performance to the employee from the outset of their employment and reiterated them in any subsequent performance appraisals.

If there is a gap between the employee’s performance and the standards expected, then this is defined as a capability issue.

Capability procedures

Due to the nature of capability and health, there are different procedures.

You must treat an employee differently if the capability is down to their ability from an employee who is struggling because of their health.

Treating both reasons the same way would leave you guilty of an unfair procedure. So let’s go over how to approach the main two types of capability.


Such shortcomings should be drawn to your attention at an early stage and expected improvements, with measurable targets laid out.

The employee should feel both supported in improving their work performance and understand the potential consequences if the improvement is not attained with a certain timescale. It may be that employees need additional support such as training to achieve the expected standards of work.

If following this, there is no improvement, it may be that a dismissal on the grounds of capability is necessary.

Medical & ill health

However, medical capability dismissal has a different procedure.

As a result of ill health, an employee may no longer be able to do the work that they were employed to do.

The first step in this situation is to establish the medical facts, which should be done through obtaining a medical report (see Access to Medical Records) following which advice should be sought on how to proceed with an ill-health capability dismissal.

This makes dismissal on grounds of capability due to ill health slightly more complicated.

To avoid claims of discrimination, as law views certain illnesses as a disability, you’ll have to prove that the dismissal was fair and as a result of their incapability.

Capability dismissal notice pay

If the employee is dismissed on the grounds of capability, usual dismissal procedures should apply. This means that the employee should be provided relevant notice pay and, if applicable, pay for untaken holidays.

Unfair dismissal & capability

Capability is one of five potentially fair reasons for dismissal.

Employment law on capability dismissal dictates that a capability at work dismissal will not be classed as an unfair dismissal provided the employer acted reasonably and fair.

However, there are complications.

Even though it is a fair reason, tribunals expect employers to follow several steps and consider several questions before dismissing an employee for capability reasons.

Specifically, the Tribunal will look at whether an employer:

  • Genuinely believed the employee was incapable to do the job.
  • Carried out a proper investigation of the employee’s performance.
  • Told the employee about the underperformance and gave clear warnings.
  • Gave the employee chance to improve.
  • Offered suitable alternative work if this was possible.

Capability dismissal disability discrimination

When dismissing an employee for capability, the employer should ensure there is no discrimination taking place and if in doubt, refer to the Equality Act 2010.

For example, if the reason for the capability problem is linked to the fact that the employee is disabled under the definition of the Act, then the employer is required to make reasonable adjustments to attempt to remove the difficulties that the disability is causing.

Failing to do so can lead to unfair dismissal claims as well as discrimination.

Expert support on dismissals with Peninsula

It can be difficult to work out if an employee isn’t performing because of conduct or capability, and equally as hard to manage. Knowing how to support your employee through any capability issues can help you save on recruitment costs and any disruptions to business.

But sometimes, your best efforts won’t work. So, you need to know a fair procedure for this to avoid an unfair dismissal claim. That’s where we come in.

Our employment law and HR consultants can help with this. Peninsula clients get access to 24/7 HR support to consult our specialists on or secure air-tight contracts with our document experts.

And if you’re not yet a client, you can still enjoy a free advice call from one of our business experts. Simply call us on 0800 028 2420.

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