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Dismissing fairly for poor performance

Centurion Legal, Employment Law Specialists

Identifying the reason for dismissal

The employer must establish the reason or principal for dismissal in any unfair dismissal claim. Lack of clear evidence of poor performance is therefore likely to prevent the employer from successfully asserting “capability” as a reason for dismissal.

Does the employer have a reasonable belief in the employee’s incompetence?

The employer must show that it had a reasonable belief in the employee’s incompetence when it took the decision to dismiss.

Accordingly, there must be evidence of the poor performance, or the employer will struggle to demonstrate its “reasonable belief”. The employer’s appraisal system is most likely to reveal the poor performance. However, the appraisals or personal development reviews may not by themselves provide sufficient evidence and may need to be supplemented by further evidence.

It is not possible for an employer to rely on issues only coming to light after the decision to dismiss has been taken to justify its decision and show that its belief was reasonable.

It may be difficult to show that a relatively long-serving employee is unable to perform their job properly unless there is a change in circumstances, for example, the employee has become ill or the job has changed, perhaps as a result of advancing technology.

Investigating the reason for poor performance

Before disciplining an employee, the employer should establish what is causing the poor performance. This could be done by way of a review, before advising the employee that failure to improve is likely to result in a warning and further implementation of the procedure, which could ultimately result in dismissal.

At the initial review stage, the employee does not have a right to be accompanied. However, at any meeting from which a disciplinary warning could result, an employee may bring a companion (a work colleague or trade union representative).

Where it is relevant and helpful to do so, managers should also refer to one or more of the following documents:-

  • Employment contract and up-to-date job description.
  • Training records.
  • Performance appraisals.
  • Staff handbook or operating procedures.
  • Any previous action plan under a poor performance procedure.

The review could reveal issues which need addressing, such as training and development needs, before issuing a performance (disciplinary) warning.

Similarly, any indications of ill-health or physical impairment should be investigated further in case the employer needs to consider making any adjustments in cases of disability. As a result of the investigation, the employer may decide to take no further action or else to hold a formal hearing which may result in a written warning.

Giving the employee the chance to improve

The ACAS Code recommends that at least two warnings are given before an individual is dismissed for poor performance, unless there is gross negligence, or the employee is still in their probationary period.

What is a reasonable timescale for improvement?

What period of time is considered reasonable is a fact-sensitive question and will depend on the circumstances and the role in question. If a capability procedure provides for a certain timescale for improvement, this should be adhered to, and equally if there is an industry standard that is considered reasonable.

In the absence of timescales set out in a capability procedure, the quality and length of the employee’s past service may be a relevant factor, as will the extent of the underperformance. Tribunals will always focus on what was reasonable in all the circumstances.

It may often make sense for employers to link the timescale to a natural part of the business cycle, for example, a quarterly sales target period or the duration of the particular phase of a project. The extent to which relationships with a customer or other third party are affected by the underperformance may be relevant to the timescale given for improvement.

Support or training

An employer’s failure to offer appropriate support or training may make a subsequent dismissal unfair. Accordingly, an employer should give consideration to whether training and/or support may assist the employee to improve (in dialogue with the employee), at all stages of a capability procedure.

Reviewing progress

The employer should diarise the review period. Having notified the employee that their performance will be monitored and discussed (usually halfway through the timescale set for improvement), it is likely to be unreasonable if the employer fails to adhere to this.

Poor performance hearings

Where the employee fails to improve sufficiently, a formal meeting should be arranged. The employee should be notified, in writing, of the following:-

  • The nature of the shortcomings in their performance.
  • The date, time and place of the capability meeting.
  • Summary of relevant information and any relevant documents.
  • The procedure to be followed.
  • The possible consequences if performance is found to have fallen short of the required standard.
  • The right to be accompanied by a trade union representative or a work colleague.


The ACAS Code requires that the hearing must be held without unreasonable delay, but not so quickly that the employee has not had a chance to prepare their case. The employer should adhere to the relevant internal procedure (if any) for timescales. As a rule of thumb, notice of less than two working days or more than ten working days would run the risk of being unreasonable.

The aim of the meeting will be to:-

  • Enable both employer and employee to explain their cases fully.
  • Give the employee ample opportunity during the interview to respond and give their explanation to the issues raised in relation to their performance.
  • Explore and, if possible, identify the cause of the underperformance.
  • Determine what, if any, remedial action can be taken.
  • Obtain the employee’s commitment to reaching the required standard.
  • Set a reasonable period for the employee to reach that standard.
  • Agree on a monitoring system during that period.
  • Tell the employee what will happen if that standard is not met.

Most importantly, the employee should be notified in writing of the outcome of this meeting (which may to issue a written warning – either a first or final, depending upon the stage in the procedure) and their right of appeal, along with any time limit applicable.

Dismissal and appeal

Considering alternative employment

The employer should consider alternative employment/redeployment before dismissing the employee. It may not always be possible (depending upon vacancies, etc), but the employer should be able to show that they have considered the possibility and discussed it with the employee.

If the employer decides to dismiss (with notice, or pay in lieu as appropriate), they should always offer a right of appeal. This should be to someone of equivalent if not higher status than the original decision-maker.