What is Capability Procedure in Employment Law?

Luisa Ddakis | 30 May 2022 | 2 years ago

According to the Employment Rights Act of 1996, an employee’s capability can be defined by their level of skill, aptitude, overall health, or any other mental or physical quality they possess. If an employee is unable to perform the duties associated with their position, the employer has the right to terminate their employment.

There will be occasions in which an employee will fail to meet the expectations that you have established for them. Before taking any action, it is essential to conduct a comprehensive investigation into the situation because the occurrence could have been caused by a variety of factors.

It would be to the disadvantage of your company to fire somebody haphazardly, so investigations are often a useful way to proceed before coming to a decision like that.

But at the other hand, it is possible that at some point in time your involvement will be required and this could happen at any time.

According to the laws governing employment, the two fundamental totally justifiable grounds for dismissal which are outlined are conduct and incapability.

This section will concentrate on capability, which is defined as the capacity of an employee to successfully carry out the responsibilities that are affiliated with their job. We have outlined the process that you are required to follow so that you do not run the risk of being accused of firing an employee in an unethical way.

What exactly is meant by the term capability procedure?

To distinguish themselves from issues relating to an employee’s behaviour, issues of capability focus on an employee’s capacity to carry out the responsibilities that are associated with their role. Therefore, in the event that this matter develops into an official concern at work, the method for handling it will be a procedure known as capability.

A written capability policy and procedure should be in place so that employees are aware of and able to comprehend the required levels of work and attendance in the workplace. This will ensure that employees are able to meet their obligations. This should be included in the employee handbook, which will also provide specific examples of what is expected of employees.

As opposed to behaviour, a lack of capability refers to a lack of, for instance, skills or aptitude. Conduct refers to how one behaves. Intentional rule breaking is what we mean when we talk about conduct. It may be a cause for concern if an employee puts in a lot of effort to perform well but falls short of meeting their objectives despite their best efforts. Employment will be terminated in situations where there is an insufficient pool of qualified candidates.

Why is a capability procedure necessary for me?

One of the potentially justifiable grounds for firing an employee is their lack of capability. It is less likely that a dismissal you make for capability reasons will be considered unfair by an employment tribunal if you use a formal capability procedure.

Procedures pertaining to capability as well as disciplinary action should be included in an adequate set of employer policies. In most cases, the procedure for dismissing a candidate’s capabilities will comprise a number of components, including informal and informal processes.

When an employer is dealing with issues surrounding poor performance or incapability because of illness, there are several related issues that could lead to claims being filed with an employment tribunal. (such as discrimination based on a person’s disability) or which could lead to other procedures relating to disciplinary action or termination of employment.

As a consequence of this, it is absolutely necessary for you to have a procedure that is both transparent and objective, as well as an understanding of how to handle issues that are related to capability.

Capability procedures in employment law, when used properly, have the potential to be an effective method for managing employee performance and preventing dismissal decisions before even addressing any underlying factors and giving employees the chance to improve. Using these procedures correctly can also help stop you from paying employees much more than they are owed.

In what way should the procedure be carried out?

The procedure ought to make it possible for you to contemplate the means by which you can assist your employee in improving their performance and collaborate with them to make certain that the employee’s performance improves to an acceptable level.

The following are some of the steps that are recommended to be taken:

  • Give some thought to an informal resolution.
  • The results of the investigation.
  • An invitation to participate in a business meeting.
  • The meeting to discuss our capabilities.
  • Warnings.
  • Additional evaluations of performance.
  • Making a decision regarding what will take place in the event that your performance does not improve.
  • Dismissal.
  • Appeal.
If an employee is not performing up to the required standards at work, the employer should first consider holding an open meeting with that employee to address the situation in the hope that the employee will improve their situation on their own volition. If the meeting does not improve the employee’s performance, the employer should then consider taking additional disciplinary action against the employee.

If, following the completion of a capability review procedure, the employer notices that the employee’s performance has not improved, the employer may choose to initiate a formal capability procedure.

They need to begin by conducting an investigation into the employee’s performance and collecting evidence that demonstrates the areas in which they are deficient. This could include evidence of poorly executed work or complaints from customers, but it could also vary depending on the role that they play in the company.

After that, you will need to conduct an official hearing, to which the employee will have to be formally invited using a capability procedure template letter.

The subsequent steps ought to adhere to the capability policy and procedure established by the employer.

After the meeting, you may come to the conclusion that an official warning is necessary. In this warning, you would inform the employee that additional formal action would be taken if their performance did not improve.

You and the employee need to come to an agreement on how best to assist the employee, which may involve additional training or supervision.

A procedure for determining employment capability will lay out increasing sanctions in the event of continued poor performance, which will ultimately result in termination of employment. However, an employment tribunal will anticipate that the employer has made every effort possible to improve the employee’s performance but will assume that the employer has failed to do so. If this is not done, there is a possibility that the employee will be terminated unfairly, despite the fact that there may be legitimate concerns about the employee’s ability.

Different kinds of capabilities and procedures

An ill-health capability procedure, also referred to as a medical capability procedure, is one of the many kinds of capability procedures that are used in the workplace, and their specific names vary depending on the circumstances.

If the individual is struggling with their health in any way, shape, or form, you cannot follow the performance process with them because it will not be fair.

Unsatisfactory performance

You need to make sure that the problem isn’t just a lack of effort on your part first. It’s possible, for instance, that the worker doesn’t like their job and therefore puts in very little effort.

In the event that there is not a lack of application, but rather a lack of ability, this is the point at which the procedure for poor performance capability begins. The following items should be communicated to the employee in writing:

  • The specific reasons why their work does not meet the requirements that have been set.
  • The expected level of performance (s).
  • A timetable for the anticipated improvement, along with an explanation that the employer will evaluate them at that point in time.
  • The assistance, guidance, and/or training that will be provided to the worker in some capacity.
In the event that the required standard(s) are not met at the conclusion of the improvement notice period, you have the option to consider firing the employee. This is contingent upon the fact that you have provided the employee with the aforementioned information, that it is reasonable, and that it contains sufficient detail to allow them to make those improvements.

Inadequate health

If an employee has been absent from work due to illness for an extended period of time and it is thought highly unlikely that they will be well enough to return to work within a reasonable timeframe, you have the right to terminate their employment as long as you follow the correct procedure.

Before you can justify firing someone on the grounds that they are sick, you need to fulfil the following requirements:

  • Conduct an investigation into the events that have transpired to determine how much time has likely passed since the employee was last seen at work.
  • Extend an invitation to the worker to participate in a meeting at which you will present all of the data at your disposal and ask them to share their perspective on whether or not they believe their position should continue to be available for a longer period of time.
  • Be sure to take into account any fit notes.
Talking to the employee about their concerns and looking into their medical history should both be part of the investigation.

You have the option of asking the employee to consent to a medical opinion being approached, but the employee is free to decline. You should be aware that the General Data Protection Regulations (GDPR) and the Access to Medical Reports Act apply to any method.

Letters serving as templates for capability procedures

During the course of the procedure, there may be more than one letter sent. These are the following:

  • Request a meeting to discuss the stage 1 capability.
  • A letter describing the outcome of the stage 1 capability meeting
  • The conclusion of the Stage 1 Capability Review Meeting.
  • Request a meeting to discuss the stage 2 capability.
  • A letter reporting the results of the stage 2 capability meeting.
  • A letter summarising the findings of the Stage 2 Capability Review Meeting.
  • Request a hearing for the stage 3 capability.
  • A letter describing the Stage 3 capability hearing outcome.
  • A letter summarising the findings of the Stage 3 Capability Review Meeting.
It is imperative that you send these letters during the process in order to ensure that it can be documented for the tribunals to review.

Assistance from knowledgeable personnel regarding discharges

It is not always easy to establish whether an employee’s lack of effort is due to their actions or their capabilities and managing them can be just as challenging as it is sometimes difficult to ascertain whether an employee’s lack of performance is due to their actions or their capabilities.

If you are able to support your employee through whatever capability issues they may be having, you will save money on recruitment costs, but you’ll also eliminate any business disruptions, which would save you money.

Despite this, there are situations in which your best efforts simply won’t be sufficient. Therefore, in order to prevent a claim of unfair dismissal, you need to be familiar with a procedure that is fair for this matter in order to protect yourself from any potential legal action.

The importance of looking into other options besides being fired

It may be irrational not to do so based on the scale and administrative resources of the employer. Although there is no absolute requirement on an employer to look at alternative employment or demotion before deciding to dismiss for capability reasons, it is important to note that there is such an obligation.

A process for appealing a decision

A right to appeal against any disciplinary action must be provided in accordance with the ACAS Code of Practice. This requirement applies to capability warnings as well as any subsequent dismissal for capability-related reasons.

An employee has the right to appeal a warning or notice of dismissal; the appeal must be made in writing, must include the employee’s grounds for appealing, and must generally be made within five working days of the warning or notice being issued.

Training for managers in this area is also essential to ensure that matters of performance are handled consistently and fairly and in such a way as to avoid possible claims being made against the employer in an employment tribunal.



Related Topics

Performance Appraisals Reimagined, How to Modernise Your HR Reviews
4 September 2023

Performance Appraisals Reimagined, How to Modernise Your HR Reviews

Read More →
How to Effectively Manage Remote Teams in Today’s World
30 August 2023

How to Effectively Manage Remote Teams in Today’s World

Read More →
How to Create a Positive Work Culture
9 August 2023

How to Create a Positive Work Culture

Read More →
What is the Peter Principle and How Can You Avoid It?
7 August 2023

What is the Peter Principle and How Can You Avoid It?

Read More →
How to Master the Art of Negotiation
28 July 2023

How to Master the Art of Negotiation

Read More →
Strategies to Boost Productivity
20 July 2023

Strategies to Boost Productivity

Read More →

If you enjoy reading our articles,
why not sign up for our newsletter?

We commit to just delivering high-quality material that is specially crafted for our audience.

Join Our Newsletter