When is it fair to dismiss an employee?  Conduct vs Capability

There are 5 potentially fair reasons to dismiss an employee. Two of these reasons are capability[1] and conduct.[2]  However, conduct versus capability is a grey area in managing employees.

Classifying the concerns

Determining whether concerns are related to the employee’s conduct or capability will not always be straightforward. Some cases will be clear, whilst others will be more complicated and could involve elements of conduct and capability. It is important for both the employer and employee that any concerns are correctly categorised, and that the correct procedure is adopted.

It may be that once a concern is identified, an investigation will be required to determine whether the behaviour in question relates to the employee’s conduct or capability. The ACAS Code on Disciplinary and Grievance Procedures notes the importance of undertaking an appropriate investigation to establish the facts in respect of any potential disciplinary matters.[3]

An employer should also discuss their concerns with the employee, as this may assist in identifying any underlying issues. For example, if the concern is related to an employee’s disability, this could introduce a duty on the employer to make reasonable adjustments.

What is a Conduct issue?

Conduct will usually incorporate behaviour that the employee is in control of, and it is a result of them making a choice. This would include behaving recklessly or disregarding the employer’s policies.

In circumstances where the employee’s behaviour is the concern, a formal disciplinary process might be appropriate and the employer’s disciplinary procedure should be followed.

What is a Capability issue?

Capability concerns will generally occur where the “behaviour” is out with the employee’s control and affects their performance. They may be unable to perform due to a lack of training, illness or personal circumstances which are impacting them at work, such as a bereavement.

Managing an employee’s poor performance is vital in ensuring productivity for the business. An employer should identify how the employee can improve and support them in achieving this.

If a capability issue is erroneously classified as conduct, and instead of receiving training or support an employee is subject to disciplinary proceedings, this could have significant consequences for the employer and result in a claim by the employee. For example, an employee whose output is low due to a medical condition might make a claim of discrimination arising in consequence of their disability.

Policies

It is important for employers to have clear policies in place, outlining the different processes for dealing with conduct and capability concerns. This will provide clarity for the employee and should assist employers in ensuring the correct process is followed.

Having comprehensive policies and training staff on these policies, can reduce the risk of successful claims against the employer. If you would like to discuss any issues raised in this article, please contact one of our expert employment lawyers.

This update contains general information only and does not constitute legal or other professional advice.

Laura Salmond, Partner and Accredited Specialist in Employment Law: lis@bto.co.uk / 0141 221 8012

[1]Employment Rights Act 1996 S98(2)(a)

[2]Employment Rights Act 1996 S98(2)(b)

[3]ACAS Code on Disciplinary and Grievance Procedures, Paragraph 5

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