Reasons for dismissal ― capability

Produced by Tolley in association with Hannah Freeman at Old Square Chambers

The following Employment Tax guidance note Produced by Tolley in association with Hannah Freeman at Old Square Chambers provides comprehensive and up to date tax information covering:

  • Reasons for dismissal ― capability
  • Dismissal for incompetence / poor performance
  • The procedure
  • Dismissal relating to ill-health
  • Dismissal relating to qualifications

Reasons for dismissal ― capability

Dismissal for incompetence / poor performance

Dismissal for incompetence (otherwise known as poor performance) is a potentially fair reason for dismissal. As long as the employer has acted reasonably in reaching the decision to dismiss, a tribunal will not interfere with that decision even if they themselves would have reached a different conclusion. The test applied in deciding whether or not a dismissal was fair will be whether the employer genuinely believed, on reasonable grounds, that the employee was incompetent to do their job. It is not necessary for the employer to prove that the employee was in fact incapable or incompetent.

However, the employer will usually be expected to provide evidence that they:

  1. had adequate evidence of incompetence at the time of the decision to dismiss

  2. adopted a fair procedure prior to the decision

  3. considered whether there was suitable alternative work for the employee to do

Evidence of incompetence may come in a number of forms. In some jobs, there may be a clear and objective method of assessing competence, such as productivity rate or number of faulty items produced on a production line. Other forms of evidence may include formal appraisals, the views of the employee’s supervisors and / or colleagues, customer complaints or complaints by colleagues about the employee’s work performance.

Before deciding to dismiss for incompetence, an employer should generally follow a procedure, ideally agreed with but at least notified to employees. In any event, the procedure should follow the Acas Code of Practice on Disciplinary and Grievance Procedures. See the Discipline and grievance procedures ― general requirements and Acas disciplinary and grievance code guidance notes.

A failure to involve employees or, where appropriate, their representatives in the development of the procedure may constitute a breach of the Acas Code of Practice, which the employer would then have to justify. The procedure would normally include a number of stages. At each stage, the employee should be given the right to

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