A medical capability dismissal procedure may become necessary when an employee’s health prevents them from carrying out their role reliably.
However, dismissal should remain a last resort. Employers should obtain suitable medical evidence, consult the employee and explore adjustments or alternative work before ending employment.
A rushed decision can lead to claims for unfair dismissal or disability discrimination. Therefore, employers should follow a fair process and keep clear records of every important step.
What is a medical capability dismissal procedure?
Capability is a potentially fair reason for dismissal under the Employment Rights Act 1996. It includes situations where an employee cannot perform their role because of ill health.
Medical capability differs from misconduct. An employee who is genuinely unwell has not necessarily done anything wrong. Consequently, employers should normally use an absence or capability procedure rather than a disciplinary process.
The central question is whether the employee can return to their role within a reasonable period or perform it with suitable support.
The employer must consider the individual circumstances. These include the employee’s prognosis, length of absence, business impact and any disability-related duties.
When may medical capability become an issue?
Medical capability may require formal consideration where an employee has remained absent for a significant period or cannot carry out essential duties.
It may also arise where repeated health-related absences make attendance unreliable, despite previous support and reviews.
Before starting a formal process, employers should consider:
- the nature and likely duration of the condition;
- the employee’s current ability to work;
- the effect of absence on the organisation;
- support or adjustments already attempted;
- the likelihood of a reliable return; and
- whether another suitable role may be available.
An absence policy may contain review points. However, reaching a trigger should begin a review rather than produce an automatic warning or dismissal.
Our sickness absence advice for employers page explains the wider principles for managing attendance fairly.
Obtaining current medical evidence
Employers should obtain reliable and up-to-date medical information before making important capability decisions.
A fit note may provide enough information for a straightforward absence. However, a longer or more complex case may require an occupational health assessment or a report from the employee’s doctor.
The employer should obtain the employee’s consent and ask focused questions about their ability to work. Useful questions include:
- What is the likely return date?
- Can the employee perform their normal duties?
- Could adjusted hours or duties support a return?
- Is the condition likely to meet the definition of disability?
- Is further treatment likely to improve the prognosis?
- Could the employee undertake an alternative role?
Medical advice informs the employer’s decision but does not make it. The employer must assess the report alongside the employee’s views and its operational needs.
Consulting the employee fairly
The employer should keep the employee informed and arrange meetings at appropriate stages of the process.
During consultation, the employee should have an opportunity to explain their condition, likely recovery and any support they believe would help.
If the employee cannot attend the workplace, the employer should consider a video meeting, telephone call or another suitable arrangement. It may also allow written representations where attendance is impossible.
The employer should avoid presenting dismissal as inevitable. Even at a final capability meeting, it must remain willing to consider new evidence and realistic alternatives.
Medical capability dismissal procedure and disability
An employee’s condition may amount to a disability under the Equality Act 2010. If so, the employer must consider reasonable adjustments before dismissal.
Possible adjustments may include altered hours, amended duties, specialist equipment, home working or changes to absence procedures.
The employer should discuss potential adjustments with the employee and consider relevant medical recommendations. If one proposal is not workable, it should explore other options.
An employer does not have to make an adjustment that is unreasonable. Nevertheless, it should be able to explain what it considered and why particular proposals were rejected.
Our article on dismissing an employee with a disability examines the additional discrimination risks.
Considering alternative employment
Before dismissing the employee, the employer should check whether a suitable alternative role exists.
The employer does not normally have to create a new position. However, it should consider genuine vacancies that the employee could perform with reasonable training or adjustments.
A suitable role might involve different duties, reduced physical demands or another working pattern. The employer should discuss the vacancy rather than assuming that the employee would reject it.
If no appropriate vacancy exists, the employer should record the search and its outcome.
Holding a final capability meeting
If earlier steps have not produced a sustainable solution, the employer may invite the employee to a final capability meeting.
The invitation should explain the concerns, provide the evidence and warn that dismissal may result. The employee should receive enough time to prepare.
At the meeting, the employer should review:
- the employee’s attendance and current health;
- the latest medical evidence;
- the likelihood and timing of a return;
- adjustments and support already considered;
- available alternative roles; and
- the effect of continued absence on the business.
The employer should consider everything the employee says before making its decision. Where important new information emerges, it may need to adjourn and investigate further.
Ending employment on medical capability grounds
If dismissal becomes necessary, the employer should confirm the decision and reasons in writing.
The letter should state the termination date, notice arrangements, final payments and right of appeal. Medical capability dismissal will normally require contractual or statutory notice.
The employee may also remain entitled to accrued holiday pay and other contractual benefits.
An impartial manager should hear any appeal where possible. The appeal provides a final opportunity to review medical evidence, adjustments and procedural concerns.
Common medical capability mistakes
Employers often increase their legal risk by relying on outdated medical evidence, failing to consult properly or treating absence triggers as automatic dismissal points.
Other mistakes include overlooking disability, failing to consider alternative work and deciding that an adjustment is unreasonable without examining it properly.
Our employee sickness management page provides further information about managing the process before dismissal becomes necessary.
Advice on the medical capability dismissal procedure
A medical capability dismissal procedure should establish whether the employee can return within a reasonable period and whether appropriate support could preserve employment.
Employers Law helps businesses obtain relevant evidence, manage capability meetings and reduce the risks surrounding sickness-related dismissal.