Jurisdiction(s):
United Kingdom

Key definition

Capability definition

What does Capability mean? In employment law, capability describes an employee’s ability to perform the work required by their contract to a reasonable standard. It commonly underpins performance management, capability procedures and capability dismissals. Across England & Wales and Scotland, the Employment Rights Act 1996 recognises capability as a potentially fair reason for dismissal, assessed by reference to skill, aptitude, health or any other physical or mental quality. Northern Ireland law uses the same concept under the Employment Rights (Northern Ireland) Order 1996. In Ireland, “capability, competence or qualifications” is a permitted ground under the Unfair Dismissals Acts. Practically, capability covers two main situations:...

Employer performance management and capability procedure: precedent client letter compliant with the Acas Code (England, Wales and Scotland)

Published by a LexisNexis Employment expert

Precedents

Note: this letter is prepared in broad terms without reference to any particular scenario. You should adapt the letter where you are Advising on an identified employee and the specific facts. Where the employer operates its own performance and Capability procedure (or a Disciplinary process addressing inadequate performance), you must refer back to that policy throughout the letter, linking each stage of the process and any time limits set within it. You may discover that the employer’s procedure requires additional warnings or imposes other steps. This letter proceeds on the basis that performance review periods will be shorter than the duration of any warnings issued. Ensure cross-references appear at each stage and that all stated deadlines are meticulously observed throughout the procedure.

[ name and address of client ]

Dear [ name ]

Performance and capability procedure

I write to outline my advice on running a performance and capability process for an employee whose performance falls below the required standard. The principal legal exposure, if the process is not managed with care, is a claim for Unfair dismissal where the procedure ends in dismissal for substandard performance. Additional legal exposures include claims of constructive dismissal and unlawful discrimination...

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Web page updated on 22/05/2026

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