Capability and disciplinary action


What is capability?

S98 (2) (a) Employment Rights Act 1996 makes Capability or Lack of qualifications a potentially fair reason for dismissing an employee. Capability covers a range of issues from lack of productivity to an inability to establish good working relationships with clients or colleagues.

Your employer can dismiss you on these grounds if they believe that you cannot do your job to the standard required of you. This can be because you can’t work to the skill level needed for the job. It could also be because you can’t carry out the work because you are ill and your employer needs to get the work done. This means you can be dismissed because of your poor sickness record, but your employer will have to go through particular steps to do so.

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Resources Available

Surviving Capability and Performance Management

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How to fight dismissal on Probation

Disciplinary action and capability

Discrimination at work

How to survive a criminal charge, conviction or caution at work

Social Media and Unfair Dismissal

Surviving a disciplinary investigation at work

The Disciplinary Hearing

Alcohol and Drugs at work



Lack of Qualifications

Problems with a lack of qualifications arise where you lose a qualification that you need for your job, or where you are not able to get a qualification that you need for your job. For example if you are a driver and you are disqualified from driving, or a teacher who is barred from teaching. In these circumstances a dismissal would be fair, and you would not have a claim in the Employment Tribunal. A situation where your employer needs you to get new qualifications because of a different way of working or new technology is treated differently.  The requirement for the particular qualification should not be discriminatory.

In the case of Homer v Chief Constable of West Yorkshire Police [2012], the Supreme Court said that a requirement that employees obtain a law degree before they could be promoted to the highest grade was indirect age discrimination against Mr Homer, who did not have enough time to complete a degree before he reached the employer’s retirement age.


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This means that employers must be prepared to justify having a strict requirement that an employee has to have a particular qualification in order to be promoted.


Performance Management

The usual process is Performance Management. This is the process of improvement after your employer identifies an issue about your capability or qualifications. Most employers have performance management policies and procedures that are used in managing issues of capability.

Performance Management is not part of discipline. If you are provided with training and support but are still unable to meet the standards, then it will become a misconduct issue for which you can be dismissed following the disciplinary process.

It is usually unfair to dismiss an employee for one instance of incompetence. But in certain circumstances, such a dismissal would be fair. An example is the case of Taylor v Alidair Ltd. [1978]. Mr Taylor landed an aircraft negligently and put the lives of passengers at risk.

The Court of Appeal said that his dismissal in this case was fair because Mr Taylor had undermined his employer’s confidence in his ability to do his job. In Retarded Children’s Aid Society Ltd v Day [1978], the Court of Appeal said that in some cases it may be reasonable to dismiss without giving the employee a second chance, particularly with a person who is to go on in his own way.


What should you look out for?

Your employer will try to show that your dismissal was a fair dismissal under S98 (2) Employment Rights Act 1996. It is up to your employer to prove that it was a fair dismissal. To win in a tribunal, you need to show that it wasn’t. Your employer has to do two things in the Employment Tribunal.

  1. Show that they were justified in dismissing you.
  2. Show that they followed a fair procedure in dismissing you.

In order to show that they were justified in dismissing you, your employer will have to go through the “Reasonableness Test” in s98 (4) Employment Rights Act 1996. A fair procedure would be in your employment contract or workplace disciplinary policy and procedure. If there is no disciplinary policy and procedure then you should refer to the ACAS Code of Practice on Discipline and Grievance Procedures and the accompanying Guidance.


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Your employers duty to act reasonably

S98 (4) of the Employment Rights Act 1996 says that your employer must show that they acted reasonably in treating capability as a sufficient ground for dismissing you.

Your employer has to show;

  1. That they genuinely believed you were incapable of doing the job, with reasonable grounds for them to believe this, your incapability or lack of qualifications relates to the work you’re employed to do and is detrimental to the business. Your employer must show evidence of the standards that you are alleged not to have met in the form of job descriptions, competencies, appraisals, and policy.
  1. That they informed you of their dissatisfaction and set out the expected standard, and criticisms and future requirements were objective and readily comprehensible by you.
  1. How you failed to meet those standards, including the steps they took once they realised you were not up to the job. Evidence will include a performance improvement plan or improvement note signed by you, and minutes from performance review meetings.
  1. What they did to ensure that you could do the job in the first place? Including evidence that they gave you;
  • Reasonable time to improve.
  • The correct instructions, training and support to improve.
  • Set realistic targets
  1. That your employer considered fairly whether you had achieved what was expected, including;
  • Using an objective assessment of measurable targets;
  • Giving you an opportunity to answer the conclusions arising from the trial period;
  • Listening to your explanation with an open mind;
  • Considering the explanation and all favourable aspects of the Employee’s service record and any fault on the part of the Employer in terms of poor training, management, or promotion;
  • Exhausting all possible remedial steps such as training, counselling, and redeployment?

Your employers duty to follow a fair procedure

Your employer needs to show that they followed a fair procedure before dismissing you on the ground of capability.

Your employer has to show that they;

  • Carried out an investigation or assessed your performance.
  • Warned you what was likely to happen if you failed to improve.
  • Gave you a reasonable chance to improve.

If your employer cannot prove that they were justified in dismissing you and that they followed a fair procedure, then your dismissal will be unfair and you will be able to get compensation in the Employment Tribunal.




This resource is published by Employee Rescue Limited. Please note that the information and any commentary on the law contained herein is provided for information purposes only. The information and commentary does not, and is not intended to, amount to legal advice. Employee Rescue accepts no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material contained in this publication.

Further specialist advice should be taken before relying on the contents of this publication. You can send an e-mail to for such specialist advice if required.


Case Study

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