Introduction to this document

Dismissal due to poor performance

When you want to confirm a dismissal on the ground of poor performance, you will need our dismissal letter. This is the final sanction for a lack of capability that isn’t the employee’s fault.

Potentially fair dismissal reason

Under the Employment Rights Act 1996 one of the five potentially fair reasons for dismissal is capability, which is defined in the legislation as meaning the employee’s “capability assessed by reference to skill, aptitude, health or any other physical or mental quality”. So, provided you follow a fair warnings procedure to its natural conclusion and you act reasonably in treating capability as a sufficient reason for dismissing the employee, then it should be a fair dismissal. The legal test is whether your dismissal decision was within the “band of reasonable responses” open to you, so you’ll need to show you gave the employee sufficient opportunity to improve and you did what you could to support them. The performance issues will also need to be more than minor or trivial.

Can’t or won’t perform?

It’s possible to deal with performance issues through your disciplinary procedure. However, where the issue is one of “can’t perform” (due to lack of capability) as opposed to “won’t perform” (for example, because of laziness or a negative attitude), it’s much better to opt for a performance review procedure which is aimed at assisting the employee to improve their performance, rather than seeking to attach blame. So use our Notice of Performance Review Meeting and Warning of Poor Performance letters to help you through the earlier stages of the process.

Dismissal letter

A Dismissal due to Poor Performance letter should state that the reason for dismissal is the employee’s poor performance due to their lack of capability, explain the nature of their performance failings and how you have dealt with the matter on an ongoing basis and include a right for the employee to appeal against your dismissal decision. If the employee brings a claim for unfair dismissal, as discussed above, you will need to show both fair reason and fair procedure, so your dismissal letter will be an important piece of evidence.

Acas Code of Practice

The dismissal letter should also comply with the Acas Code of Practice on Disciplinary and Grievance Procedures, as the Code covers performance dismissals. It provides that, following the performance review meeting, you must inform the employee of your decision and of their right of appeal. Our letter not only ensures compliance with the Acas Code but also serves as a prompt to check that everything else is covered, e.g. accrued holiday pay, notice period (and whether you want them to work it) and the effective date of termination of the employee’s employment.

Alternative employment

Unlike disciplinary dismissals, prior to taking a capability dismissal decision, you should also give consideration to offering any available alternative employment which is within the skill and capability level of the employee. This may be on less favourable employment terms, such as a reduced salary, as it is likely to be a lower level job. You can’t demote the employee or transfer them to an alternative post without their express agreement, so this would be one for them to choose to accept or not. Our letter assumes you’ve considered alternative employment but haven’t been able to find any suitable alternative position.