A medical capability dismissal is when a person’s employment is terminated because of their prolonged inability to execute their work responsibilities due to ill health. Legally, this is deemed a fair reason for dismissal—but only if the employer adheres to procedure that’s comprehensive and caring. For a dismissal to be considered fair, an employer must be able to show they acted fairly during the process. Key factors are the nature of the illness; the employer must collect medical evidence to understand the employee’s health condition. Also, the employer must consider the impact on the business, and finally, a dismissal should be a last resort after exhausting all other options. It’s a challenging area, especially if the employee has a disability recognised by the Equality Act 2010. If proper process isn’t followed, employers could face unfair dismissal and discrimination claims.
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What is a Medical Capability Dismissal?
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Yes, provided the employer follows a fair process, which includes trying to make reasonable adjustments, offering support and getting medical evidence.
Employers must seek to find reasonable adjustments. They may arrange an occupational health assessment, as well as confer before making a final decision.
If you’ve exhausted all your options regarding adjustments, and there are no alternative roles suitable for the employee, you may be able to dismiss them on capability grounds.
If your employee has a great attitude but still can’t complete their work, it may be a capability issue. Read more to ensure you dismiss them legally and fairly.
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When a worker is on sick leave for a long time, you might have to decide whether you can afford to keep them.
Ideally, employers would provide and give them enough time to recover from ill health. But when workplace disruptions increase, you may face a .
Read our guide on how to deal with dismissals due to medical capability. And discover your legal obligations for ill workers, avoiding harsh penalties falling on your business.
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The short answer is yes, you can dismiss an employee on long-term sick leave. But only after following reasonable legal procedures.
If it’s unlikely the ill worker will be healthy enough to return to work, you can consider dismissing them based on grounds of medical capability.
Workers on long-term absence can have impacts on business performance, productivity and ultimately, your bottom line. Let’s look at how medical capability dismissals are defined.
What is a medical capability dismissal?
Medical capability dismissal is a fair reason for dismissal based on a lack of capability due to health-related reasons.
Under the Employment Rights Act 1996, there are five factors that outline fair grounds for dismissing an employee:
The act legally defines it as, ‘capability assessed by reference to skill aptitude, health or any other physical or mental quality’.
Dismissing workers on long-term sickness absence should always be done sensitively. You must follow a fair procedure.
Work capability is generally based on a worker’s qualifications, competence, and health. To dismiss a worker based on incapability issues, you need to show that you gave them a fair opportunity to improve their work performance or return to health.
Why do I need to follow a capability procedure?
If you wrongly action a dismissal, you could be liable of discrimination and unfair dismissal, which could lead to:
.
Financial penalties.
Business disruption.
Lowering workforce productivity.
Decrease in workforce morale.
Reinstatement or re-employment.
How to manage workers on long-term sickness leave
Dismissals should always be a last resort. Before opening that door, you must firstly consider alternative methods like:
Changing their work schedules.
Offering remote working.
Allow flexible working hours.
Re-assign their tasks and responsibilities.
Workers on long-term sick leave should be offered ‘reasonable adjustments’ to help them return to work.
You should establish the nature of their illness and the estimated timeframe of their absence. If it’s over seven days, they must present a fit note. Workers who are sick for over a month should be offered an absence review meeting. Especially if the chances of returning to work are low.
In the ill health capability dismissal meeting, discuss the following factors:
The type and level of illness.
Possibility of symptoms recurring.
Recovery time.
Length of absence.
Medical advice received.
Changes that will help returning to work.
Change of duties or alternative employment.
Employers should send written invitations for all meetings and document all decisions and agreements.
It’s also advised to ask workers for medical reports from GPs or hospitals (with permission). Or ask them to speak to an occupational health adviser, who can provide tailored support on reasonable work adjustments.
Workers with disabilities and terminal illnesses
Following dismissal procedures is especially vital for workers with a disability classed under the Equality Act 2010. For these workers, you should provide short-term or long-term workplace support and adjustments.
For workers with terminal illnesses, allow them to express their wishes about working first. That way you can make suitable business changes for their interests as well as your own.
Some terminally ill workers may want to work up until their last day. Others may be facing financial issues and rely on their or other benefits. In the end, it’s better to understand their wishes before making rash assumptions.
How to issue dismissal due to medical capability
Firstly, hold all the absence review meetings needed for the ill worker. And make all reasonable adjustments you possibly can. After then, it may be time consider dismissal on capability medical grounds.
Each individual worker and situation will have separate outcomes and regulations. Revolving around specific health conditions, workplace positions, and business impacts.
Once you have decided on a potential dismissal, you need to follow the fair procedure written in your employment handbook. Invite the worker to the meeting and clearly outline your dismissal decision.
Present the medical information which shows their chances of returning to work are slim. And the alternative methods for reasonable work adjustments. After the discussions, provide written meeting documents to the worker.
Remember that throughout the dismissal process, check whether workers are entitled to:
Contractual notice.
Holiday pay.
Statutory sick pay.
Employment and Support Allowance (ESA).
Personal Independence Payment (PIP).
Universal Credit.
Letter for medical capability dismissal
After following a fair procedure and your decisions are legally accepted, you should present workers with a letter for medical capability dismissal.
The letter will outline your reasons for dismissal, their notice period, and the decided date for employment termination. As well as the fair process that followed reaching the decision.
Once you’ve made the decision of dismissal and the worker is aware, the letter should be sent as soon as possible. The letter should include the following:
Your reasons for dismissal
Clearly outline your reasons and include references with evidence to back them up. But be careful not to disguise your real reasons for letting worker go, as this will lead to allegations of unfair dismissal.
Evidence for your decision
Present evidence that backs up your decision on capability dismissal. Such as showing that it’s unlikely the person will be able to return to work in the near future
The dismissal procedure
Explain what is included in the procedure when actioning your decisions on dismissal. For example, additional medical reports, further absence meetings, or even any consultation processes that may be required.
The extent of notice periods
Clearly state whether the worker is required to carry out a notice period or not. Despite a minimum notice period being drawn in legislation, it falls on employers to decide whether to use it, or offer a longer contractual notice period.
Decisions on a contract termination
Once you’ve decided on an end date, you should let the worker know at the final meeting and include it within the letter. Also outline calculations for final salary payments and holiday pay.
You should also include any other practicalities that the worker will benefit from knowing. Things like P45 letters and arrangements for returning company property, etc.
Right to appeal decisions
Remember that workers have a legal right to appeal any decisions made throughout the dismissal process. Make sure they are aware of this right, as well as other methods for seeking further advice on appealing.
FAQs about medical capability dismissal
Given the law surrounding medical capability dismissal can be complex, our experts often receive the following questions:
Are they any special conditions?
If the employee’s disability falls under the Equality Act, not making reasonable adjustments could be unlawful discrimination.
What happens upon dismissal?
The employee is entitled to serve their contractual notice period and receive pay for unused annual leave. They’ll receive a dismissal later outlining the reasons, notice period, and other entitlements.
Peninsula provides expert advice on medical capability dismissal
In most situations, leaving dismissal as a last resort works out better for all parties. But if it’s unavoidable, it’s always best practice to end business relations on a mutually accepted and professional note.
Peninsula offers expert advice on medical capability dismissals. And our HR specialists can help you deal with the legal steps before taking the decision.
Peninsula clients also get access to 24/7 HR consultation on specialist guidance on employee relations and .
And if you are not yet a client, you can still enjoy free advice from one of our business experts. Simply call us on 0800 028 2420.
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