Poor Performance Procedure UK: Employer Guide

What this document is

Poor performance (sometimes called capability) is where an employee cannot meet the standards expected of their role, whether through a lack of skill, knowledge, or sustained output. It sits separately from misconduct, which is about behaviour rather than ability, though the procedural expectations overlap.

Under UK employment law, capability is one of the five potentially fair reasons for dismissal set out in the Employment Rights Act 1996. To rely on it lawfully, an employer generally needs to show they had a genuine belief in the capability issue, reasonable grounds for that belief, and followed a fair procedure.

The ACAS Code of Practice on Disciplinary and Grievance Procedures is the benchmark tribunals use to judge fairness. A capability process typically moves through informal feedback, a performance improvement plan, formal hearings, written warnings, and a final hearing before any decision to dismiss.

Each stage gives the employee a real chance to improve and to be heard, with the right to be accompanied at formal meetings.

How to use this document

1. Start with an informal conversation. Before anything formal, sit down with the employee and raise the concerns directly. Be specific about what's falling short, listen to their side, and agree practical steps for improvement. Many performance issues resolve at this stage without needing a paper trail, and tribunals look favourably on employers who try this route first.
2. Put a performance improvement plan in place. If informal discussion doesn't shift things, move to a structured plan. Set out measurable targets, the support you'll provide (training, coaching, adjusted workload), a clear review period, and the consequences of not meeting the standard. The employee should understand exactly what success looks like and by when.
3. Hold a formal capability hearing. If improvement doesn't come, invite the employee in writing to a formal hearing. Give them enough notice, share the evidence you're relying on, and remind them of their right to be accompanied by a colleague or trade union representative. At the hearing, let them respond fully before you decide on any outcome.
4. Issue a written warning where justified. After the hearing, if the concerns are made out, you can issue a first written warning setting out the shortfall, the improvement required, the review period, and the risk of further action if things don't change. A final written warning follows the same structure but signals that dismissal is the next step.
5. Consider dismissal only as a last resort. If performance still hasn't improved after warnings and genuine support, a final hearing can be convened to consider dismissal. Before deciding, think about whether a suitable alternative role exists, whether any underlying health issue has been properly explored, and whether the process has been fair throughout. Always offer the right of appeal.

Common questions