It is a familiar situation: the employer wants to believe that they have made the right choice for the role, and the employee hopes that they will have a long and trouble-free time in post. However, over time it becomes clear that they are simply not capable of carrying out the responsibilities given to them as part of their job.

At this point, the employer may wonder what they can do. There is a big difference between someone who has committed gross misconduct and someone who is clearly struggling – for whatever reasons – with the demands of the job. One thing is sure: the employer cannot just call the employee into the HR office, hand them their P45 and say “It’s not you, it’s us” before wishing them well and showing them the door.


What steps should be taken?

There are specific procedural steps that must be taken by an employer considering a performance dismissal before moving to the point of termination. If they fail to do so, this could result in any dismissal being ruled unfair and they could face an Unfair Dismissal claim in the Employment tribunal.

As with every case, dismissal should be the final step of the process. A system of performance management should be followed first to help the under-performing employee improve. If that is successful, the employer gets a productive and settled member of staff and the threat of a tribunal claim recedes. However, the success of a performance management programme is in no way guaranteed, and if there is no significant improvement – or if there is further deterioration – then the only option left may be dismissal.

The employer, when considering what to do about poor performance, should examine the causes of this. Perhaps something was overlooked or not considered at the interview stage; a flaw in the onboarding process; the employee’s personal circumstances may have changed, or another reason altogether. Whatever the cause, an investigation may well flag up steps that can be taken to resolve it, and if not, at the very least, it will show the tribunal that all reasonable steps were taken.

Many employers already have a performance management process in place, and if not, they should draft and implement one as soon as possible, preferably in consultation with HR professionals to avoid problems further down the line.


Ensuring fairness

Whatever process is followed, the employer needs to show that it is what is known in law as equitable. This means that it must incorporate justice and fairness in its process. In the event that the employee is eventually dismissed due to poor performance, the employer will need to show that the process they followed was fair, so it makes sense to embed those principles of fairness into the system at the start.


Opportunity to improve

To ensure that the process is fair, the employer needs to be able to show that they have given the employee a “reasonable opportunity” to make improvements to their performance before taking the final step in the process, that of dismissal. Whilst there may be several interpretations of the term “reasonable opportunity”, it is generally held to involve the following elements:

  • Ensuring the employee is aware of their poor performance and why this conclusion has been reached (with evidence if available)

  • Verifying that the employee is aware of the standards expected of them and for their job

  • Providing extra training and support if it is found necessary. Insufficient support or training may lead a tribunal to conclude that the dismissal is unfair.

  • Ensuring enough time has been given to the employee to make the required improvements before the disciplinary/dismissal process starts.


Alternative options

As we have mentioned, dismissal should always be considered the last resort. There are alternative steps that can be taken before matters reach that stage, which will reduce the risk of a tribunal claim.


Another role

In the event of a tribunal hearing, the defence will be strengthened if the employer can show that they looked into the possibility of alternative employment and discussed it with the employee. The alternative may have been refused by the employee or ultimately found not to be viable or practicable; it may be that a new role was just what the employee needed, giving them a chance to thrive and the employer a chance to find someone more capable for the original role.


Reasonable adjustments

We referred earlier to the investigative process that can be carried out when issues with performance are first noticed. This may well show up factors that were not immediately spotted at the interview and which may not have been mentioned by the employee for whatever reason. This could relate to an unnoticed disability or personal issues that affect their performance.

If their poor performance is due to a condition that can be classed as a disability under the Equality Act 2010, then the employer needs to think carefully before moving to the stage of dismissal. Have they looked at the possibility of making reasonable adjustments for the condition? Have other means of support been discussed or has the employee been given time for their condition to improve?

As with all matters of disability, once it has been brought up, the employer needs to get professional medical advice on the employee’s condition – for example, a report from a GP or Occupational Health.

There are circumstances in which dismissal on the grounds of medical capability will be considered fair, but it is important to ensure that at all stages of the process, the law has been taken into account to avoid or minimise the risk of a tribunal claim. Sometimes a tribunal claim cannot be avoided even if the employer has followed the correct process and done everything to support the employee, therefore the Employer should seek to do everything it is able to do in order to build the strongest case possible.



The investigation may highlight that the employee occupies a role that is too challenging for them. The reasons for this may be due to their performance during the interview process or an over-estimation of their capability. In this case, it may be an idea to offer them a role that is perhaps more suited to their abilities, rather than dismiss them. This will, however, require a variation of their contract of employment, which will require legal guidance to ensure it is done correctly.


What does the law say?

Under Section 98 of the Employment Rights Act 1996, there are five fair reasons for dismissal; in the words of the Act:

(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show-

(a) the reason (or, if more than one, the principal reason) for the dismissal, and

(b) that it is either a reason falling within subsection (2) or some other substantial reason of any kind such as to justify the dismissal of an employee holding the position which the employee held.

(2) A reason falls within this subsection if it:

(a) relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do,

(b) relates to the conduct of the employee,

(c) is that the employee was redundant; or

(d) is that the employee could not continue to work in the position held without contravention (either on the employee’s part or that of the employer) of a duty or restriction imposed by or under an enactment.


What is the role of ACAS?

The ACAS Code of Practice on disciplinary and grievance procedures contains guidelines which are not statutory, but it is a legal duty on employment tribunals to look at the Code when they are trying to decide if the dismissal is fair or not. An employer who follows the ACAS guidelines will increase their chances of successfully defending a claim against them for wrongful or unfair dismissal.


The dismissal process

When beginning the dismissal process, the employer needs to have the necessary paperwork to hand, including the employment contract, the employee’s job description, records of the training they have received in order for them to carry out their job, any performance evaluations prior to and including the current one, the employee handbook and any strategies that have been drafted and implemented to cover performance management and improvement.

There are several stages of the performance dismissal process that must be followed; for each of these steps, the employer needs to ensure that they give the employee plenty of time to respond to any invitation to a meeting, provide written confirmation of any decisions made, allow an appeal against that decision, confirm the next step in the process and what the employee has to do.

The ACAS guidelines set out minimum recommendations for the dismissals process, which are that it should include:

  • At least one verbal warning

  • At least one formal written warning

  • A final warning

The guidelines also recommend that each stage of the warning process should have a specific duration – for example, three months, six months or a year. They suggest that taken as a whole, the process should not last longer than 18 months.

When performance reviews are carried out, this should be done before the expiration of the relevant warning.

If the employee’s performance has not improved, then the employer needs to begin the next warning stage before the current one expires.

Should the final written warning expire with no improvement, the employer can issue notice of the employee’s dismissal.

The appeal

This should be handled by a person at the same level of seniority as the person who made the original decision and preferably not involved in the dismissal process.

Uplift of compensation

The employment tribunal will look at the ACAS guidance when considering whether the dismissal really was unfair. If the tribunal concludes that the employer did not follow the ACAS guidance, they will apply an increase of up to 25% in the compensation awarded to the employee.