What the law says about dismissing employees

The Employment Rights Act 1996 lists five fair reasons for dismissal:

• conduct
• capability
• redundancy
• statutory ban
• some other substantial reason

Poor performance, also referred to as capability, can be a reason for dismissal.

Employers should keep in mind that there can be an overlap between poor performance and conduct, or other issues such as health or disabilities, e.g. if an employee is more than capable, but is refusing or failing to perform.

ACAS guidelines on dismissal

Although capability can be a fair reason to dismiss an employee, it is essential an employer handles such a situation in a fair way.

ACAS has provided clear guidance on fair dismissal for employers. Although the guidance is not law, whether an employer has followed the guidelines will be considered when deciding if an employer acted fairly in a dismissal case.

Reasonable opportunity to improve

Where there is an issue about performance, the employee should be given ‘reasonable opportunity’ to improve before any disciplinary action is taken. This involves letting the employee know about the employer’s concerns and exactly what is expected of them.

The employer should also provide any additional training and support necessary and allow a reasonable amount of time for the employee to improve before taking steps towards dismissal.

It is very important at this stage that the employer communicates exactly what is expected accurately and transparently.

Failure to improve

If an employee does not improve, despite being given a reasonable opportunity, an employer may wish to initiate their disciplinary procedure.

ACAS advises that this should be done with:

• at least one verbal warning
• at least one formal written warning
• a final warning

It is helpful at each stage to set reasonable and realistic targets, including clear time limits. The consequences of not achieving these should also be explained.

The employer should also make sure proper performance reviews are provided before the end of each period, along with any necessary support, and a chance to explain what, if any, the problems are.

Written warnings

If the employee’s performance still fails to improve, the employer should send an official letter or email inviting them to a disciplinary meeting.

In the text of the communication, the employee should be made aware of:

• the precise nature of the poor performance
• the fact that the meeting is part of the disciplinary process
• the right to have someone accompany them to the meeting.

Starting dismissal proceedings for poor performance

Should the employee still not improve after verbal and written warnings, and having been given the opportunity to improve, the employer may decide to dismiss them.

That said, the employer should still consider the employee’s circumstances to make sure the poor performance is not linked to other issues, such as health or a disability.

Dismissal for poor performance during probation

Probation periods are slightly different, as employees will not have the benefit of two years’ employment and the resulting protection from unfair dismissal. In addition, probationary periods are, in part, designed to allow employers to assess capability.

However, employers should still act fairly before enacting dismissal proceedings, and should always ensure the terms of the probation period and any dismissal procedure are clear. This will help avert any claim for wrongful dismissal.

Dismissal for poor performance without notice

If an employee has been dismissed for poor performance without warning, and has been employed for more than two years, they may be able to claim for unfair dismissal. If a warning was not issued prior to dismissal, they may also have a claim.

Whether the claim is likely to succeed will depend on the extent to which the employer acted reasonably and fairly and followed the correct procedure. For example, just giving one warning and a short period in which to improve may not be enough.

Even if an employee knew their performance was poor, but the employer didn’t follow correct procedure, they may still be able to claim.

Again, the success of such a claim would depend on the circumstances, such as whether there were other reasons for the poor performance, and whether the employer acted fairly.

Dealing with the legal implications of dismissal due to capability

Poor performance dismissals can be delicate and complex situations to handle. It is imperative that reliable and accurate professional advice is obtained.

Whether you are an employer who must ensure correct disciplinary procedure has been followed, or an employee concerned that they have been the victim of an unfair dismissal – how a tribunal may view a case will hinge on whether the correct guidance was observed.

At Springhouse, our team of experienced employment law solicitors can draw on their knowledge and expertise to ensure poor performance concerns have been handled fairly.