Reasons for dismissal ― capability

By Tolley in association with Hannah Freeman at Old Square Chambers

The following Employment Tax guidance note 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

All case references in this guidance note are subscription sensitive.

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 his job.

Taylor v Alidair [1978] IRLR 82

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

  • had adequate evidence of incompetence at the time of the decision to dismiss
  • adopted a fair procedure prior to its decision
  • 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 and / 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 his employees. In any event the procedure must 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

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