David Royden is a Partner with Laytons Solicitors and Head of Employment Law, Manchester, UK

Laytons Solicitors is a national law practice specialising in all aspects of Company and Commercial Law

Laytons Solicitors, 22 St John Street, Manchester M3 4EB.
Tel: +44 (0) 161 834 2100
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Offices at London, Manchester and Guildford, UK




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Where an employee is not performing to the standard required to perform their duties at work, an employer should adopt a capability procedure in relation to that employee. This procedure is designed both to encourage the employee to improve, but also, where no improvement or insufficient improvement results, to ensure that the employer has acted reasonably and fairly if it ultimately becomes necessary to consider dismissing the employee. The procedure is set out in stages as follows:

Informal Discussion

The initial step involves an informal discussion with the employee focusing in particular on how the employee is thought not to be performing satisfactorily. It is necessary for the employer to ascertain whether the employee accepts there is a problem and, if so, whether he or she will respond to constructive moves and suggestions to aid improvement. The response of the employee will generally be one of the following:

  • the employee accepts there is a problem and leaves it to the manager to suggest what should be done
  • the employee expresses doubt there is a problem, but indicates willingness to respond to any suggestions the manager may make
  • the employee acknowledges the problem and asks for help to resolve it
  • the employee denies the existence of any problem

The employer should make and keep an informal note of the date, time and conclusions reached for his or her own use later if the need to refer back to this initial conversation arises.

Non-Critical Approach – Willingness to Respond

Where the employee expresses a willingness to respond to any suggestions for improvement or asks for help to resolve the problem, the employer should adopt a non-threatening and non-critical approach with the aim of helping the employee to find a solution through a sensitively-handled discussion. The employer should encourage the employee to describe the problem ensuring that pertinent questions are not evaded by the employee.

Ultimately the employer should ensure that the discussion is shaped so that the real problem is unearthed, the factors contributing to it are explored, possible solutions are identified and discussed, and if possible an action plan agreed to help the employee to overcome the problem. After the discussion it may be appropriate for the employer to put any agreed action plan into a separate note and give a copy to the employee.


Arrangements should be set in place to monitor the employee's continuing performance with the observations on it being recorded. The employee's performance should be assessed as objectively as possible and as frequently as appropriate, bearing in mind the nature of the employee's duties and the length of time which would be reasonable to allow for improvement.

If the employee has already indicated that he or she does not accept that his or her performance at work is inadequate the employee is unlikely to respond constructively to persuasion to improve. This type of response can justify shortening the monitoring period which might otherwise be allowed for improvement.

If after the agreed period of monitoring there has been a failure to improve or continued unsatisfactory performance, the employee should be invited to a formal interview to discuss the matter and informed that there will then be an opportunity to put forward an explanation and to be accompanied by a colleague or Trade Union representative of their choice.

Formal Interview – Written Warning

At the interview the employee should be reminded of the earlier informal discussion and of the steps taken to encourage improvement, and be told as precisely as possible of the complaints about his or her performance. If the explanation offered is not accepted, a formal written warning should be given to the employee as soon after the interview as possible. It should inform the employee that his or her job may be at risk if satisfactory performance is not achieved and sustained.

Following the issue of the written warning a second period of monitoring and assessment should continue as appropriate. The length of this second period must be reasonable and the employer must be able to demonstrate this.

Consideration of Alternative Employment

If the employee's improvement following the formal warning is insufficient to enable him or her to be regarded as capable of doing the work he or she is employed to do, the employer should consider whether alternative (but not necessarily equivalent) employment can be offered to the employee, and, if so, make the offer in writing, explaining why it is being made and the possible consequences of refusing it. The employee should then be given sufficient time to consider the offer.

Dismissal / Further Monitoring

Where no offer of alternative employment is made (or the employee has rejected it) a further formal interview with him or her is necessary. Again the employee should be informed of it in advance and the reasons for it. At the meeting a history of the case should be discussed and the employee's explanations, if any, listened to and considered before a decision is taken whether or not to allow further time for improvement, backed by a further warning or caution, or whether dismissal is the only alternative.

Right of Appeal

If notice of dismissal is given the employee should be told of any available right of appeal. This right of appeal would be the same avenue of appeal as would be available if appealing against a disciplinary decision.

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