Capability dismissal is a sensitive and complex issue that employers may face when an employee is unable to perform their job duties to the required standard. This can be due to a lack of skills, knowledge, or aptitude or because of ill health or a disability. As an employer, it is crucial to handle capability dismissals fairly, legally, and with empathy to ensure the best possible outcome for all parties involved. In this article, we will explore the concept of capability dismissal, the legal framework surrounding it, and best practices for managing the process.

What is Capability Dismissal?

Defining Capability Dismissal

Capability dismissal refers to the termination of an employee’s contract due to their inability to perform their job to the required standard. This can be related to an employee’s skills, knowledge, or aptitude, or it may be a result of ill health or a disability that affects their ability to carry out their duties effectively. Capability dismissal is distinct from dismissal due to misconduct or redundancy, as it specifically relates to an employee’s ability to do their job.

Legal Framework Surrounding Capability Dismissal

In the UK, capability dismissal is governed by the Employment Rights Act 1996 and the Equality Act 2010. Employers must ensure that they follow a fair and reasonable process when considering capability dismissal and that they do not discriminate against employees on the basis of a protected characteristic, such as a disability. Failure to follow the correct procedures or to act fairly and reasonably can result in a claim of unfair dismissal.

The Capability Dismissal Process

Identifying and Addressing Performance Concerns

Before considering capability dismissal, employers should first identify and address any performance concerns with the employee in question. This may involve:

  • Setting clear expectations and performance targets
  • Providing regular feedback and performance reviews
  • Offering training, support, or resources to help the employee improve
  • Investigating any underlying issues, such as ill health or personal problems, that may be affecting performance

Formal Capability Procedure

If performance concerns persist despite informal interventions, employers should initiate a formal capability procedure. This typically involves:

  • Inviting the employee to a formal capability meeting to discuss their performance
  • Providing evidence of the performance issues and setting clear improvement targets
  • Agreeing on a support plan and review period to monitor progress
  • Conducting regular review meetings to assess improvement and provide feedback
  • Issuing warnings if performance does not improve to the required standard

Considering Dismissal

If, after following the formal capability procedure and providing reasonable support and opportunities for improvement, an employee’s performance still does not meet the required standard, dismissal may be considered. Before making a decision to dismiss, employers should:

  • Ensure that they have followed a fair and reasonable process
  • Consider any mitigating factors, such as ill health or disability
  • Explore alternative options, such as redeployment or demotion
  • Consult with the employee and allow them to be accompanied at meetings
  • Provide the employee with the right to appeal the dismissal decision

Best Practices for Managing Capability Dismissals

Clear Policies and Procedures

To ensure consistency and fairness, employers should have clear policies and procedures in place for managing capability issues and dismissals. These should be communicated to all employees and applied consistently across the organisation.

Training for Managers

Managers play a crucial role in identifying and addressing performance concerns. Providing training on managing capability issues, having difficult conversations, and following fair procedures can help managers handle these situations effectively and minimise the risk of legal claims.

Open Communication and Support

Throughout the capability dismissal process, it is essential to maintain open and honest communication with the employee. Providing regular feedback, support, and opportunities for discussion can help the employee understand the concerns and feel more engaged in the process.

Consideration of Ill Health and Disability

If an employee’s capability issues are related to ill health or a disability, employers have a legal duty to make reasonable adjustments to support them in their role. This may involve modifications to the work environment, equipment, or duties. Seeking advice from occupational health professionals, such as London City Healthcare, can help employers understand their obligations and implement appropriate adjustments.

Documenting the Process

Maintaining accurate records of capability meetings, support plans, and reviews is crucial to demonstrate that a fair and reasonable process has been followed. This documentation can provide valuable evidence in the event of a legal claim.

The Role of Occupational Health

Occupational health providers, such as London City Healthcare, can support employers in managing capability dismissals by:

  • Assessing an employee’s health and capability to perform their role
  • Advising on reasonable adjustments and support measures
  • Providing guidance on managing absence and return to work processes
  • Supporting employees with ill health or disabilities to maintain their performance

By working closely with occupational health professionals, employers can ensure that they are taking a proactive and supportive approach to managing capability issues and minimising the need for dismissal.


Capability dismissal is a challenging and sensitive issue that requires careful management to ensure fairness, legality, and the best possible outcome for all parties. By having clear policies and procedures, providing support and training for managers, considering individual circumstances, and seeking expert advice from occupational health providers, employers can navigate the capability dismissal process with confidence and compassion. Ultimately, investing in the health, wellbeing, and performance of employees is not only a legal obligation but also a key driver of organisational success.

This article has been written by London City Healthcare, a leading occupational health provider in the UK. Our team of experienced professionals is dedicated to supporting employers in managing the health and wellbeing of their workforce, including providing guidance on capability dismissals and related issues. We offer a range of services, including occupational health assessments, fit for work assessments, and health questionnaires to businesses throughout the UK. For more information on our services and how we can support your organisation, please contact us directly on 0207 236 3334.

Dr Amun Kalia

Dr Amun Kalia

Dr. Kalia helps to run the Occupational Medicine provision for London City healthcare and is a company doctor for one of the largest multinational companies based in the UK.

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