Managing Conduct & Capability –
Do employers know the difference and what they can and can’t do?
The law requires that a fair reason is given for any dismissal; that the disciplinary process leading to the dismissal conforms to standards of fairness and natural justice; and that the decision to dismiss is reasonable in all the circumstances. An Employment Tribunal will look at the whether the employer followed the agreed procedure i.e. was the process of the dismissal reasonable and were the reasons for dismissal reasonable. This includes following an appropriate procedure before dismissing them.
Therefore, an employer has to be seen to be considering all the options properly and going through a fair procedure. If they don’t, they may end up with an unfair dismissal claim, even if the end result would have been the same anyway, fair procedure or no fair procedure. It is therefore advisable to have a capability procedure which is distinct from the disciplinary procedure covering conduct.
Dismissal is the termination of an employee’s employment – with or without notice and there are now five potentially fair reasons for dismissal:
- Relating to the employee’s capability or qualifications for the job.
- Relating to the employee’s conduct
- Statutory grounds i.e.: because a statutory duty or restriction prohibits the employment being continued (e.g. if a lorry driver lost his driving license he would no longer be able to comply with the law which governs his job)
- Some other substantial reason SOSR; (long term imprisonment of the employee, for example, would mean that they were no longer able to under the work they are being paid to do)
It is important that any dismissal proceedings, and all the disciplinary penalties to that point, distinguish clearly between breaches of performance standards and conduct issues.
Capability and conduct should be treated separately. Employers need to recognise the difference between warning someone for a capability matter and warning him for his conduct. If the employers fail to distinguish between the two, they are much more likely to run the risk of a successful unfair dismissal application. This means that where an employee already has a warning for misconduct, and then demonstrates a lack of capability, employers should issue him with a first warning for the capability matter, quite separate from the misconduct.
Think of Capability as something an employee can’t do.
Within a capability procedure, the manager needs to collect evidence to substantiate the claim that performance is consistently below the required standard and that the cause of the below standard performance is not hidden problems or more serious breaches that would merit the use of a disciplinary. In deciding whether an employer was reasonable in dismissing for incompetence, it may be relevant to know whether appropriate training was given to the employee.
Dismissal on grounds of capability will be for one of two reasons:
- Lack of ability or skill – this can be repeated minor incompetence or one serious act of incompetence (poor performance). Indeed, under-performance is one the most frequent reasons for discipline and one of the least well handled. It’s the employer’s responsibility to demonstrate that poor performance is the reason for the dismissal and that there is reasonable belief the employee is not capable of working to the required standard. It would not be fair to dismiss for a first breach if the incompetence is minor.
Employers must help the employee by doing everything reasonable to help him meet the required standard of performance. This normally takes the form of coaching, re-training, giving a reasonable amount of time to improve (two months rather than two weeks) and generally supporting the employee. Employers must warn the employee before dismissal of the consequences of failure to improve.
- Lack of capability because of ill health. It is fair to dismiss an employee who is no longer capable of working because he is too unwell to do so. If employees receive organisational sick pay as a contractual benefit, the dismissal should not become effective until the sick pay is exhausted or paid in lieu. In cases of long-term ill health, employers should concentrate on investigating the medical facts and consulting with the affected employee about the available options. In these circumstances, it is not appropriate to go through any lengthy disciplinary or warnings procedure.
Since 1995, the Disability Discrimination Act (now the Equality Act 2010) has placed an additional obligation upon employers to consider alternatives to dismissal where the ill health is caused through an illness which is defined as a disability. If the employee may be disabled within the definition of the act, there is a requirement to consider making reasonable adjustments to the work or the workplace. Employers must consider all the other options apart from dismissal. It may be possible to find an alternative job or change the job content to accommodate the employee’s changed requirements.
Disciplinary action for unacceptable absence must be distinguished from dismissal on health grounds. Employers need to be aware of the full range of conditions that count as a disability for the purposes of the Equality Act 2010 where an employee is suffering from a condition covered by the Act, reasonable adjustments must be made to help them return to work.
Think of Conduct as something an employee won’t do.
- Misconduct or unacceptable behaviour occurs when a rule is broken, or some other unacceptable behaviour happens such as poor timekeeping or poor attendance.
- Poor Performance as a result of an employee’s inaction, rather than inability should result in disciplinary action, following a thorough investigation.
- Gross misconduct is a very serious breach of conduct by the employee and employers must list the offences consider to be gross misconduct in the organisation. It may be an act or an omission, but it is tantamount to a fundamental breach of contract by the employee e.g. Theft, fighting, abusive or intimidating behaviour, consumption of alcohol while on duty. Example – an employee is never absent, performs well and always gives output above standard in terms of both quality and quantity – but the employee is caught stealing. This is clearly gross misconduct – not poor performance.
- High Levels of Sickness absence is an area that falls under Conduct and would be dealt with via this process rather than capability. However, care needs to be taken to ensure that reasonable caution is given when looking at the amount of absence when someone has a registered disability. Although you can still take them through the process if absence is high you need to ensure you consider a higher threshold of absence than you would with a normal employee.
Dismissal for a reason relating to the conduct of an employee will be fair, provided the companies disciplinary procedure is properly followed.
For further advice and guidance please call us on 0844 880 4582.
About the author: Lisa Butler is Head of Training Services at Right Hand HR.