EMPLOYMENT LAW ADVICE - CAPABILITY

A guide on capability and performance at work from the employment law experts

Marjon Law, specialist employment lawyers is owner-led by Marc Jones, who is ranked and recommended in legal publications as a leading employment law solicitor, with over 20 years of experience practising solely in employment law.

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What is capability?

Capability refers to the skills, ability, aptitude and knowledge we have in relation to the job that an employee is employed to do.

Lack of capability, will in most cases lead to unsatisfactory performance in a job role role. However, the key distinction is that a lack of capability is usually unintentional. On the other hand, disciplinary issues is linked to behaviour that falls below the required standard and can be intentional.

In some cases, it can be difficult to determine whether poor performance is due to incapability, a lack of effort or a mixture of the two.

Unlike grievances and disciplinaries, there is no code of practice governing what a capability procedure should include.

To deal with a capability issue, an employer should follow a procedure that encourages an employee to improve.

A capability procedure could include:

identify where the employee is failing to meet the level of performance
invite the employee to attend a capability meeting
hold the capability meeting - provide the employee with a performance improvement plan (PIP) setting out what is expected of the employee with timescales for reviewing the PIP (eg 1, 2 or 3 months) [stage 1]
confirm the outcome of the capability meeting in writing and any sanctions should the employee fail to meet the requirements of the PIP (eg written warning, final written warning, demotion, dismissal, or transfer to another department)
confirm the date for reviewing the PIP at a further capability meeting
invite the employee to attend a further capability meeting (if there is no improvement and if a disciplinary sanction is contemplated eg written warning, allow the employee to be accompanied at the meeting by a work colleague or trade union official)
hold the capability meeting [stage 2]
confirm the outcome of the capability meeting in writing and allow the employee to appeal any disciplinary decision
confirm the date for reviewing the PIP at a further capability meeting
invite the employee to attend a further capability meeting (if there is no improvement and if a further disciplinary sanction is contemplated eg final written warning, allow the employee to be accompanied at the meeting by a work colleague or trade union official)
hold the capability meeting [stage 3]
confirm the outcome of the capability meeting in writing and allow the employee to appeal any disciplinary decision
confirm the date for reviewing the PIP at a further capability meeting
invite the employee to attend a further capability meeting (if there is no improvement and if a further disciplinary sanction is contemplated eg dismissal, allow the employee to be accompanied at the meeting by a work colleague or trade union official)
hold the capability meeting [stage 4]
confirm the outcome of the capability meeting in writing and allow the employee to appeal any disciplinary decision.

Some employers may adopt a different procedure with say 2 or 3 stages only.

What is a performance improvement plan (PIP)?

A performance improvement plan (PIP)is a process frequently used by an employer where an employee has not performed to a satisfactory standard set by an employer. It is usually set out in writing for the employee to acknowledge and accept.

A PIPs main function is to provide a structured approach to improvement, for employees who aren’t achieving their full potential. While a PIP is not strictly a punishment and they should not be implemented lightly.

Some employers implement PIPs as a way of helping and retaining employees. Whereas some employers use PIPs, as a stepping stone to dismissal, as in reality the decision has been made that an employee is no longer right for the role.

A PIP should:

be developed and approved by the employee’s manager (and HR if applicable)
clearly and objectively set out where the employee is failing
clearly state the steps the employee should take to improve their performance
set out the improvement expected of the employee using measurable objectives
state whether any support or training will be provided
provide for the timescales and frequency of reviews (eg 1, 2 or 3 months)
make clear what sanctions there will be should the employee fail to meet the requirements of the PIP.

By following a PIP, an employer is seeking to show that a correct process has been followed and that an employee has been given a reasonable opportunity to improve. If an employee fails a PIP, after an employer correctly follows a reasonable process, it will be difficult for an employee to argue that they have been unfairly dismissed.

In most cases, an employee has no control over capability issues. Therefore, a PIP may be perceived by an employee to be without foundation and this could amount to a breach of the implied term of trust and confidence giving rising to a claim of constructive dismissal. For example:

there is a personality clash between an employer and their manager
an employee has time off due to illness, which has affected their performance and support has not been provided
an employee with a disability impacts their ability to do their job and adjustments are not provided
to force the employee to leave rather than face the indignity of a PIP.

Where a PIP has been implemented and an employee has a disability, this could amount to discrimination arising from disability and failure to make reasonable adjustments.

What should happen at the capability meeting?

During a capability meeting relating to an employee's performance, an employee should be:

informed of the shortfall between their performance and the required standard
given a reasonable opportunity to consider their response to that information
told by the employer the root cause of the poor performance and to determine any remedial action (ie a PIP)
set a monitoring period of improvement (normally 1 to 3 months) for the employee to reach the required standard
informed what the employer will do to assist the employee during the monitoring period
arrange a date for a further capability meeting.

After the capability meeting, the employer should confirm the outcome in writing and provide the employee with a right of appeal against any sanction.

What if an employer does not have a capability procedure?

If an employer does not have a capability procedure, then it is likely that they will follow a disciplinary procedure instead.

The material contained in this web page is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.