Yes, it is possible for employers to dismiss an employee for poor performance. Capability is a potentially fair reason for dismissal under section 98 of the Employment Rights Act 1996. An employee with at least 2 years’ continuous service with their employer will be able to claim unfair dismissal in the Employment Tribunal if they have been dismissed unfairly. An employer defending a claim for unfair dismissal will need to be able to show that:
- The principle reason for the dismissal falls within one of the categories of potentially fair reasons for dismissal (conduct, capability/qualifications, redundancy, breach of statutory duty or restriction, some other substantial reason);
- The employer acted reasonably in all the circumstances in treating the reason as sufficient to justify dismissal, including the requirement to adopt a fair procedure before taking the decision to dismiss. This is often known as the range of reasonable responses test.
The above illustrates the importance of following a fair procedure, an otherwise fair dismissal can be held to be unfair due to procedural errors alone. For further information on what constitutes a fair performance capability procedure, please get in touch with our team for expert legal advice.
In the context of dismissal for capability reasons, the tribunal will not only want to be satisfied that the employer honestly believed, on reasonable grounds, that the employee was incapable of performing their job to the required standards but, with regard to the overall reasonableness of that decision, will consider whether management failed to discharge its own responsibilities towards the employee. An important element of this will be the extent to which the employer has clearly communicated the requirements of the role to the employee or, where applicable, has provided necessary support and training.
Generally, case law has established that a dismissal for poor performance will not be fair unless the following key elements are present:
- A proper investigation into the problem has taken place.
- The employee has been made aware of the problem and been given an opportunity to improve within a realistic timescale.
- The employee has been provided with appropriate support and/or training.
- The employee’s progress is reviewed during the review period.
- The employee is offered a right of appeal against the decision to dismiss.
Where an employee has insufficient service to be able to bring a claim for ordinary unfair dismissal, an employer may decide to accelerate a dismissal by following a reduced performance capability procedure.
This is a commercial decision and should be made only after an analysis of the risks and taking legal advice. The fact that an employee has insufficient service to claim ordinary unfair dismissal does not mean that the dismissal is necessarily low risk as other claims without qualifying service requirements (such as automatic unfair dismissal claims, whistleblowing or discrimination) may be possible. Get in touch with our employment law experts for tailored, commercially-focused advice.
