international employment law firm alliance L&E Global
United Kingdom

UK: Unfair Dismissal: Capability

In January 2016 TWI Ltd started an informal performance management process and set objectives for Mr Fallahi, Technology Senior Project Leader, with targets to be measured in June and October 2016 and January 2017. However, by May 2016, his manager was concerned at the lack of progress being made and invited Mr Fallahi to a capability hearing. Mr Fallahi was given a final written warning with a three-month review period but after two months, his manager considered that insufficient progress had been made. Mr Fallahi went on sick leave at the end of July 2016 and, following unsuccessful settlement negotiations, was dismissed for poor performance in November 2016.

The EAT upheld the tribunal’s decision that Mr Fallahi was fairly dismissed on the basis that it could not look behind the final written warning unless it was “manifestly inappropriate”. The tribunal was entitled to find that TWI had acted fairly in applying its internal procedures, in spite of shortening the set review periods, that the final warning was not manifestly inappropriate and that overall the dismissal was fair.

The Tribunal and EAT noted that there was a history of concerns about Mr Fallahi’s performance and informal steps had been taken to manage this before a warning was issued. So the fact that TWI went straight to a final warning was not inappropriate in these circumstances – the capability procedure allowed for it and Mr Fallahi had not come close to meeting the objectives and targets set as part of the informal process.

Key Action Points for Human Resources and In-house Counsel

In capability cases, tribunals will look at the circumstances of the dismissal as a whole and consider whether the reasons to dismiss the employee were reasonable – and should only re-evaluate the merits of a final warning if it was “manifestly inappropriate”.

This case is a helpful reminder that employers must ensure a fair dismissal process is followed. With poor performance, this will normally involve giving more than one warning before dismissal and in most cases it will only be reasonable to move straight to a final written warning where it is sufficiently serious.

Fallahi v TWI Limited