Capability or Qualifications Dismissal

Capability/Qualifications Dismissal

Section 98(2)(a) ERA states that a dismissal is potentially fair if “it relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do". Capability dismissals include the following:

• Incompetence or poor performance due to the employee’s inability to perform the job to the expected standard (as opposed to laziness/having a poor attitude towards work which will fall within conduct);

• Ill health, including both long-term illness and intermittent short-term absence from work (as opposed to unjustified absence, which would fall within conduct); and

• Lack of qualifications, for example losing a requisite qualification or failing to obtain a new qualification required for the job (as opposed to lying about qualifications which would fall within conduct).

Dismissal due to capability or qualifications is a potentially fair reason for termination of employment. This type of dismissal falls under Section 98(2)(a) of the Employment Rights Act 1996 (ERA 1996), which states that a dismissal is potentially fair if it relates to an employee's capability or qualifications for performing the work they were employed to do.

Understanding Capability and Qualifications

Capability is defined broadly to include an employee's skill, aptitude, health, or any other physical or mental quality relevant to performing their job. The capability issue must specifically relate to the work the employee was employed to perform. It's important to note that a dismissal can be fair even if the employee is still able to do only a part of their job. In practice, capability dismissals are typically categorized into two main groups:

• Dismissals due to an employee's poor performance.

• Dismissals due to an employee's ill health.

Qualifications refer to any degree, diploma, or other academic, technical, or professional qualification pertinent to the employee's position. This can even include qualifications awarded by the employer itself. Dismissals related to qualifications often arise in several scenarios:

• Soon after recruitment, when it becomes apparent that the employee lacks the necessary qualifications.

• When an employee is hired with the understanding that they will obtain certain qualifications but fail to do so.

• When the employer's requirements change, necessitating additional qualifications that the employee fails to acquire.

• When an employee loses a crucial qualification during their employment, such as a driving license for a driving job.

Fairness Assessment and Procedural Requirements

For a capability or qualifications dismissal to be considered fair, an employment tribunal applies the "range of reasonable responses" test. This means the tribunal must determine whether the employer's decision to dismiss the employee fell within the band of responses that a reasonable employer, in similar circumstances and in that specific business, might have adopted. Crucially, the tribunal must not substitute its own view for that of the employer. This test applies both to the decision to dismiss and to the investigation and procedure that led to that decision.

To act reasonably and ensure procedural fairness in capability dismissals, employers generally need to consider several factors:

Employee Awareness

The employee should be aware of what is required of them.

Risk Minimisation

The employer should take steps to minimise the risk of poor performance.

Appraisal and Problem Identification

There should be a proper appraisal of the employee, and the problem should be clearly identified.

Support and Development

The employer should provide training, supervision, and encouragement where appropriate.

Warnings and Opportunity to Improve

The employee should be warned about the consequences of failing to improve and be given a reasonable chance to do so.

Consideration of Alternatives

In some cases, the employer should consider alternatives to dismissal, such as offering alternative employment.

ACAS

While the Acas Code of Practice on Disciplinary and Grievance Procedures (Acas Code) explicitly states that it applies to misconduct and poor performance dismissals, it does not apply to ill-health dismissals. However, the non-statutory Acas guide, which accompanies the Code, does offer guidance on managing long-term absence due to ill health.

Specific Considerations for Ill-Health Dismissals

When an employee is dismissed due to ill health, this falls under capability. Key aspects for fair ill-health dismissals include:

Medical Evidence

Tribunals consider medical evidence crucial for estimating how long an employee would have remained employed and what benefits they would have received.

Supervening Ill-Health

An employee's ill health following dismissal does not automatically break the chain of causation for compensation, unless in unusual circumstances. Tribunals should estimate how long the employee would have been employed and the benefits (e.g., contractual or statutory sick pay) they would have received during that period.

Disability Discrimination

If the ill health qualifies as a disability under the Equality Act 2010, the dismissal could also lead to a claim for unlawful disability discrimination, even if it is deemed fair under the ERA 1996. A failure to make reasonable adjustments for a disabled employee during the dismissal process will not automatically render the dismissal unfair under the ERA 1996. Still, it can give rise to a separate discrimination claim.

Causation of Illness

Suppose an employee's illness was caused or contributed to by the employer's conduct. In that case, this is a relevant factor for the tribunal to consider under Section 98(4) ERA 1996, but it does not automatically make the dismissal unfair. Tribunals must carefully examine whether the illness or incapacity was caused by the dismissal itself, as opposed to pre-dismissal conduct or the manner of dismissal. Losses arising from pre-dismissal breaches of contract that cause illness are generally considered separate common law claims, not recoverable within an unfair dismissal claim itself.