Yes — capability is one of the five potentially fair reasons for dismissal under Section 98 of the Employment Rights Act 1996. However, a tribunal will scrutinise whether you followed a fair and reasonable process before dismissing. Simply telling someone they're not good enough and terminating their employment will almost certainly result in an unfair dismissal claim.
What a Fair Process Looks Like
- Informal discussions — raise concerns early and give the employee a chance to respond
- Clear expectations — ensure the employee knows the required standard through clear objectives
- Support and training — provide the tools and help needed to improve
- Performance Improvement Plan — a formal plan with measurable targets and a timeframe
- Formal capability hearing — following the ACAS Code of Practice
- Right to appeal — the employee must be able to appeal any dismissal decision
What Tribunals Look For
An employment tribunal will consider:
- Was the employee clearly told their performance was below standard?
- Were they given a reasonable opportunity and support to improve?
- Was the process consistent with how other employees have been treated?
- Was dismissal a proportionate response, or could the employee have been redeployed?
- Was the procedure followed correctly at every stage?
Important Distinctions
- Capability vs conduct — poor performance is a capability issue ("can't do"), not a conduct issue ("won't do"). Different procedures apply
- During probation — employees with less than 2 years' service generally can't claim unfair dismissal, but can still claim discrimination
Dismissing for poor performance is one of the highest-risk areas in employment law. Our employment law specialists can guide you through every step. Get expert advice.