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Capability policy guidance

Legal Framework
 
Capability or poor performance is a potentially fair reason for dismissal. However, it is important that the company follows a fair procedure in reaching, and taking, the decision to dismiss.
 
The ACAS Code of Practice on Discipline and Grievance ("the ACAS Code") sets out the principles and standards for a fair and reasonable procedure to be followed in the case of misconduct or poor performance.  In the event of tribunal claim, the tribunal must take account of the ACAS Code, where it is relevant to the matters before it. This will certainly apply to claims of unfair dismissal where the principal reason for the dismissal was on grounds of capability for poor performance. Any failure to follow the Code, by either party, could result in an adjustment in compensation. An increase of up to 25% could be made for an employer`s unreasonable failure to adhere to the ACAS Code.
 
The maximum limit of the compensatory award for an employee who successfully claims unfair dismissal is now £68,400 (indexed linked). 
 
The Effect of the Procedure 
 
The Capability Procedure enables the Company to address, either formally or informally, issues arising from employees` job performance.  By implementing and following this procedure, the company will be in a stronger position to demonstrate that it has dealt with these issues effectively and fairly, should any claim be made to the Employment Tribunal.  Failure to comply with this procedure could render the Company subject to claims of unfair dismissal, including constructive dismissal.
 
Although this procedure is not definitive, it is based on the requirements of the ACAS Code. As a matter of best practice you are advised not to remove anything from it. However the model should be adapted to reflect the structures within your company. The procedure should be suitable for your company, taking into account its size, administrative resources, and the existing reporting lines. 

Last updated on 11/01/2017 11:45:35 | #Poor Performance