Dismissal for Illness UK: Capability Process & Rights

At a glance

• Legal basis: capability - including health - is a potentially fair reason for dismissal under section 98 of the Employment Rights Act 1996.
• A fair reason is not enough on its own. The employer must also act reasonably and follow a fair procedure. GOV.UK's guidance on dismissals due to illness treats dismissal as a last resort, to be considered only after other options have been explored.
• Medical evidence comes first. A fair process is normally built on an up-to-date GP report or occupational health assessment, obtained with the employee's consent.
• Equality Act 2010 duty. Where a condition meets the definition of disability, the employer must properly consider reasonable adjustments before moving toward dismissal.
• Qualifying period for ordinary unfair dismissal: currently 2 years' continuous service for anyone who started their job on or after 6 April 2012, under section 108 of the Employment Rights Act 1996 - see the note below on a change that has not yet taken effect.
• Tribunal time limit: a claim must normally be brought within 3 months, and you must contact Acas for early conciliation before you can lodge it.

What counts as dismissal for ill-health capability?

Capability dismissal on health grounds is one of the potentially fair reasons for ending employment recognised by the Employment Rights Act 1996. It covers the situation where an employee cannot carry out the job they were employed to do because of illness or injury, and there is no realistic prospect of them returning within a reasonable period.

It can arise from a single long-term absence - a serious physical condition, surgery and recovery, or a mental health condition causing extended time off - or from a pattern of frequent shorter absences that, taken together, make the role unworkable. Either way, it is distinct from misconduct, redundancy or performance issues unrelated to health, and it carries its own procedural expectations.

This is also different from constructive dismissal, where an employee resigns in response to their employer's conduct. And where the real reason for dismissal is a disability itself - rather than a genuine, evidenced capability issue - that may instead, or additionally, support a disability discrimination claim.

The legal framework: a potentially fair reason, not an automatic one

Capability under section 98

Section 98 of the Employment Rights Act 1996 sets out the potentially fair reasons for dismissal. One of them relates to the employee's "capability or qualifications... for performing work of the kind which he was employed... to do", and the Act defines capability as being "assessed by reference to skill, aptitude, health or any other physical or mental quality." Ill health falls squarely within that definition.

Acting reasonably: why the reason alone doesn't decide the case

Having a potentially fair reason only gets an employer halfway there. A tribunal will also ask whether, in the circumstances - including the size and resources of the employer - dismissal was a reasonable response, judged in accordance with equity and the substantial merits of the case. In practice this means genuine investigation, proper consultation, and a decision that reflects the evidence rather than assumption. Many employers model their capability procedures on the same principles as the Acas Code of Practice on Disciplinary and Grievance Procedures, even though that Code is aimed primarily at conduct and grievance matters - tribunals still tend to look for a broadly similar standard of fairness in capability cases: consultation, evidence, the right to be accompanied, and an appeal.

The medical evidence a fair process is built on

Before any formal decision, GOV.UK's guidance on dismissals due to illness says an employer should try as many ways as possible to help the employee back to work, including getting a medical report from their GP (with the employee's permission - they have the right to see the report before the employer does) or arranging an occupational health assessment. The aim is to understand the likely prognosis, whether a return to work is realistic, and what adjustments might help.

Acting on guesswork rather than up-to-date evidence is one of the most common ways a capability process is later found to be unfair. A single old medical letter, or no medical input at all, rarely stands up to scrutiny if the case reaches a tribunal.

Reasonable adjustments and the Equality Act 2010

Is your condition a disability?

The same GOV.UK guidance on dismissals due to illness points employers to work out whether an employee is classed as disabled under the Equality Act 2010 before deciding how to proceed. You meet the statutory definition of disability if you have a physical or mental impairment with a 'substantial' (more than minor or trivial) and 'long-term' (12 months or more, or likely to last that long) adverse effect on your ability to carry out normal day-to-day activities. Certain conditions - cancer, multiple sclerosis and HIV infection - count as a disability automatically from the point of diagnosis.

The duty to make reasonable adjustments

Where a disability is established, the Equality Act 2010 places employers under a duty to make reasonable adjustments. GOV.UK's guidance on reasonable adjustments for disabled workers gives examples that apply directly to ill-health situations: a phased return to work with flexible or part-time hours, changes to duties, adapted equipment, or redeployment to a more suitable role. The duty is to take such steps as are reasonable in the circumstances - it does not require an employer to do everything conceivable, but it does require the options to be properly considered rather than dismissed out of hand.

Discrimination arising from disability

Separately, treating a disabled employee unfavourably because of something arising in consequence of their disability - most obviously, dismissal because of disability-related sickness absence - can itself be unlawful discrimination unless the employer can show it was a proportionate means of achieving a legitimate aim, and this only applies where the employer knew, or could reasonably have been expected to know, about the disability. This sits alongside, rather than instead of, the ordinary unfair dismissal rules.

GOV.UK's own guidance is direct on where this leaves an employer: if, even with reasonable adjustments, an employee genuinely cannot do their job, dismissal can still be fair - even where the employee is disabled. The duty is to consider adjustments seriously, not to guarantee that a job can always be preserved.

A fair procedure, step by step

1. Start with medical evidence, not assumptions. Obtain an up-to-date occupational health referral or, with consent, a GP or specialist report, before any formal steps are taken.
2. Hold meaningful welfare and review meetings. Regular contact during sickness absence lets both sides discuss how things stand and share medical updates. Employees are entitled to be accompanied at formal capability meetings by a colleague or trade union representative, and notes should be kept.
3. Consider reasonable adjustments and alternative roles properly. Weigh phased returns, amended duties, changed hours, equipment, or redeployment - and be able to show the thinking, not just the conclusion.
4. Move to a formal capability hearing only when appropriate. If, after proper exploration, there is no realistic prospect of a return within a reasonable timeframe and no adjustment will bridge the gap, the employer can hold a formal hearing. Give clear written notice of the hearing, the evidence relied on, the possible outcome (including dismissal), and the right to be accompanied.
5. Offer a genuine right of appeal and confirm the outcome in writing. Set out the reasons, confirm notice and any contractual entitlements, and offer an appeal to a different, more senior manager where possible - treated as a real opportunity to reconsider, not a formality.

Notice, written reasons and pay

You are generally entitled to your statutory minimum notice or your contractual notice period, whichever is longer; some contracts provide enhanced notice for long-serving staff. If you are an employee with at least 2 years' continuous service (1 year if you started before 6 April 2012), you can also ask your employer for a written statement of the reasons for your dismissal, which they must provide within 14 days. Check your contract, staff handbook and any sickness or capability policy for anything more generous than the statutory minimum.

Can you challenge the dismissal?

The 2-year qualifying period - and a change on the horizon

To bring an ordinary unfair dismissal claim, most employees currently need at least 2 years' continuous service where they started their job on or after 6 April 2012 (1 year if they started earlier), under section 108 of the Employment Rights Act 1996. Separately, this does not affect claims that do not depend on length of service, such as most disability discrimination claims under the Equality Act 2010.

The Employment Rights Act 2025 received Royal Assent in December 2025 and provides for this qualifying period to be reduced. Based on the government's published timetable, the change is expected to bring the qualifying period down to 6 months, with a proposed commencement date of 1 January 2027 - but this had not yet come into force at the time of writing, and GOV.UK's guidance still describes the 2-year rule as current. Do not assume the shorter period applies to your situation without checking the up-to-date position on GOV.UK or legislation.gov.uk first.

Acas early conciliation and the 3-month deadline

If you believe a capability dismissal was unfair, discriminatory, or both, GOV.UK's guidance on making a claim to an employment tribunal confirms you must usually contact Acas for early conciliation before a claim can be lodged, and that claims normally have to be brought within 3 months of dismissal (for discrimination claims, within 3 months of the act complained of). The clock is paused while Acas conciliation is under way, but it is not paused indefinitely - take advice early if you think you may have a claim.

What to do if you're facing a capability process

1. Engage with the process where you can. Attend meetings if possible, and ask for reasonable flexibility - by phone, in writing, or with a companion - if your health makes that difficult.
2. Get your own medical position clear. Speak to your GP or specialist about your prognosis and what would help you return, and make sure that information reaches your employer.
3. Put adjustment requests in writing. A written record of what you asked for, and how your employer responded, matters if things end up in dispute.
4. Check your contract and any sickness or capability policy for entitlements beyond the statutory minimum - notice, sick pay, and the procedure itself.
5. Take advice early if a formal hearing is arranged, if you are unsure whether you are disabled under the Equality Act 2010, or if you think the process is unfair.

What employers should get right

• Treat dismissal as a last resort, not a first step, and be able to show the alternatives that were genuinely considered.
• Base every decision on current medical evidence, not on how long an absence has already lasted.
• Document the reasonable-adjustments discussion even where an adjustment is ultimately not made - the reasoning matters as much as the outcome.
• Keep the process itself accessible: flexibility around meeting format and timing is rarely a large concession, and its absence is easy for a tribunal to criticise.

This guide provides general information about ill-health capability dismissal in England and Wales. It is not legal advice and is not a substitute for advice tailored to your specific circumstances. The law described was accurate as at July 2026 and is subject to change, including the pending Employment Rights Act 2025 reforms - always check GOV.UK and legislation.gov.uk for the current position.

Last reviewed: July 2026 by a non-practising solicitor · Next review due: July 2027 or on legislative change.