Ill health capability dismissal process

    dismissal due to ill health


    Ill health capability dismissal process

    If an employee has been on long-term sick leave or has had frequent periods of being off work due to sickness, an employer may have to weigh up the difficult decision as to whether they can keep the employee on or not.

    An employer should always take legal advice before deciding to dismiss an employee, as the risks are great if the dismissal is unfair and not dealt with according to correct procedure. There are five legitimate reasons an employer can dismiss an employee ­– but above all, a dismissal should be fair.

    This guide to dismissal on grounds of capability due to ill health helps employers understand their obligations and their employees’ rights under UK law.

    Can you dismiss an employee on grounds of capability due to ill health?

    The short answer is yes, provided it is fair to do so, and the correct capability process is followed. If an employee has been working for two or more years in an organisation, they have a right to bring a claim for unfair dismissal. Therefore, it is vital that any dismissal is considered fair.

    Under the Employment Rights Act 1996, there are five fair reasons an employer can dismiss an employee: misconduct, redundancy, illegality, capability, or some other substantial reason. This guide focuses on capability (which is defined as “capability assessed by reference to skill aptitude, health or any other physical or mental quality”), and more specifically capability due to ill health.

    Therefore, if an employer can show that they dismissed an employee on the grounds of capability due to ill health, then such dismissal may be deemed fair if the correct procedure has been followed.

    If the employee’s absence from work due to ill health means they are unable to do their job satisfactorily (as opposed to discriminating against them because of their ill health), an employer can rely on this as a ground for dismissal. The absence can either be long-term, where the employee has been off work for a prolonged period of time, or the absence can be frequent but intermittent, where an employee regularly takes days off sick.

    Dismissal should always be a last resort for an employer. Other options, such as making reasonable adjustments in the workplace, should be addressed first. An employer should encourage an employee to get back to work by providing them with every opportunity to do so or by helping them to improve their performance at work and enable them to return to full health. Evidence will be needed of any reasonable adjustments made. If all avenues are exhausted, dismissal of the employee might be the only option and therefore a fair one.

    Lawful dismissal procedure

    The first step for an employer is to check an employee’s current medical position, by obtaining, with the employee’s consent, a report from their GP or occupational health practitioner. In the case of prolonged absence, a GP will usually issue a fit note, which indicates when, and under what circumstances, an employee might be ready to return to work. In cases of intermittent, but frequent, absences, the employee will be told by the employer what level of attendance is necessary and expected of them, and in what timeframe, in order to meet the job description. The employee will be monitored and perhaps given a second warning. If absences are still frequent, dismissal may be fair at this point. All reasonable adjustments should be made, and all recommendations in the medical reports followed, so that an employer can prove he has made all reasonable efforts to get the employee back to work.

    An employer should familiarise themselves with the employee’s circumstances, in particular:

    • the length of absence
    • the nature of the illness and the likelihood of recurrence
    • the length of the employee’s service and whether there is any contractual sick pay available to them as well as any other statutory benefits – a case for unfair dismissal can be brought by the employee after two years of service
    • the employee’s ability to do alternative work within the organisation
    • a timeframe for when the employee might return to work or to full health
    • the impact of the employee’s absence on the business and on the other employees
    • whether the employee might have a disability

    An employer then needs to discuss the situation with the employee and warn them that they could face dismissal if they are still unable to carry out their duties satisfactorily or to return to work at all. The employer should refer to medical reports as evidence and give the employee a chance to respond to the employer’s assessment of the situation. Absence review meetings may be needed if the absence is over a month.

    Once an employer has made the decision to dismiss the employee, they should present the employee with a medical capability dismissal letter. This letter should contain the reasons for dismissal, with medical evidence to back those reasons up, the notice period the employee is bound by, and the final date of employment. The letter should also explain the dismissal procedure so that the employee knows what to expect. (Such procedure should be contained in an employee handbook or work policy within the workplace.) Finally, the letter should outline an employee’s final pay. This pay should include contractual notice, holiday pay, as well as Statutory Sick Pay, Employment and Support Allowance, Personal Independence Payment, and Universal Credit if the employee is entitled to these. Any other practicalities should be outlined in the letter such as the return of company property and the issuance of a P45.

    An employee has a right to appeal any decision to dismiss them, and this should be made known to them by the employer in the letter.

    Dismissal procedure in disability cases

    In cases of disability-related absence, Employment Tribunals tread cautiously, therefore employers need to be particularly careful that they have followed the correct procedure.

    An employer has a legal duty to support disability at work and needs to prove all other options were exhausted before taking the decision to dismiss the employee who may be deemed disabled. It does not matter how long the employee has been working for the employer in cases of disability discrimination.

    A disability is a physical or mental impairment which has a substantial and long-term negative effect on an employee’s ability to carry out normal daily duties. Mental impairment includes depression, anxiety, or stress.

    In such cases, an employer must show that they made reasonable adjustments in the workplace to encourage the employee back to work or to help them continue their work. Such adjustments could include offering alternative duties, lighter duties, reduced hours, or different workplace equipment, or offering a phased return, or even a longer probationary period if they are still on probation. If these adjustments are offered or made, an employer will likely be deemed to have made a reasonable effort and acted fairly in dismissing the employee.

    Employers cannot discriminate on a disability alone. They must show that as a result of the disability, the employee is unable to carry out their job role, and that therefore a dismissal would be fair under the circumstances. If reasonable adjustments are not made, an employee may have a case for unfair dismissal based on disability discrimination.

    What constitutes ‘reasonable’ depends on factors such as the size of the employer – a bigger employer will be expected to have more resources to offer than a small company – and how easy and how expensive it would be to make the reasonable adjustments.

    When is a dismissal reasonable?

    A tribunal will look at all the factors of the dismissal and decide whether under the circumstances it was reasonable to dismiss the employee and whether objectively a reasonable employer would have made the same decision. Even if there is a fair reason for the dismissal, the dismissal is only fair if an employer acts reasonably throughout the capability and dismissal process.

    Relevant factors for a reasonable dismissal include:

    • How long the employee has worked for the employer – a longer length of service might make a dismissal less reasonable.
    • How the employee’s absence has impacted the business and other staff – if it was possible for the employee’s position to be covered by other employees, a dismissal may be less reasonable. If, however, an employee is a skilled worker, it may be more difficult to find cover and therefore make a dismissal more reasonable.
    • If the employee’s chance of recovery is good and they are likely able to return to work soon, a dismissal would not be reasonable.
    • A larger organisation would cope better with finding staff to cover an employee’s absence or finding alternative duties for the employee.
    • Whether any fault lies with the employer for the employee being absent due to ill health, for instance, where an injury occurred at work, or the working conditions caused stress and depression – fault of the employer could make the dismissal less reasonable.
    • Whether the employer genuinely believed that the reason for dismissal was fair.
    • Whether all correct and relevant capability processes and procedures were followed, including whether an employee had a chance to appeal a dismissal decision.

    If a dismissal is deemed unreasonable by the employee, an employer could be liable to tribunal claims brought by the employee for unfair dismissal or disability discrimination, resulting in financial penalties, a decrease in company morale and therefore less productivity in the workplace and possible re-instatement or re-employment of the employee who was dismissed.

    Best practice advice

    Dismissal of an employee is always a last resort when all other options have been explored. An employer should look at the ways in which they can encourage an employee who has been off on long-term sick leave back to work.

    They should look at all the medical reports available to them and follow any advice therein or any recommendations made to make the employee’s work situation easier and less stressful. This could include reduced hours, amended duties, or different equipment in the workplace, such as ramps for wheelchair access or a desk near a window for someone suffering from depression.

    An employer should assess whether the employee is classed as having a disability under the Equality Act 2010. Employees with certain conditions, such as cancer, multiple sclerosis, HIV, visual impairment, or a long-term facial disfigurement, will automatically be protected under this legislation and be deemed disabled. In such cases, it is vital that an employer can show that he has made all reasonable adjustments to encourage the employee back to work, as an employer cannot discriminate on grounds of the disability alone. It does not mean that an employer cannot take into account absences due to a disability, but simply that they need to show that objectively they can justify the actions they did take in relation to the disability and the resulting absences.

    Ill health capability dismissal FAQs

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    Legal disclaimer

    The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.


    Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.

    Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing & Content Agency for the Professional Services Sector.

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