Skip to main content

Capability dismissal – a tale of two procedures


In this case update, we consider the recent case of Fallahi v TWI Ltd [2021] UKEAT 0110/19/1708 and whether the background to a final written warning should be taken into account when deciding the fairness of a dismissal.

Mr Fallahi was employed by TWI Limited as a senior project leader. Approximately eight months after commencing his employment, Mr Fallahi’s manager arranged reviews with Mr Fallahi every two weeks following concerns which had been raised about his performance.

Approximately 11 months after concerns were first raised in respect of Mr Fallahi’s performance, he was placed under an informal performance management process. The process required Mr Fallahi to meet specified objectives within a 6-to-12 month period.

Prior to the completion of the informal performance management process, Mr Fallahi was invited to a hearing under TWI Limited’s disciplinary procedure on the basis that his performance was not improving and it fell short of the standard required for his role.

At the end of the first disciplinary procedure, Mr Fallahi was issued with a final written warning because TWI Limited considered that he had been underperforming for a prolonged period.

Approximately six months after the final written warning was issued, Mr Fallahi was dismissed for capability reasons under TWI Limited’s disciplinary process.

Mr Fallahi brought a claim arguing that that TWI Limited had unfairly dismissed him under its disciplinary procedure rather than under its capability process. Mr Fallahi also challenged the decision to issue him with a final written warning under the disciplinary process before the expiry of the deadline for him to meet the objectives set for him under the capability process.

The Employment Tribunal concluded that had TWI Limited followed the capability process rather than the disciplinary process, the dismissal outcome would have been the same.  The Tribunal also found that the final written warning had been within the band of reasonable responses and was not “manifestly inappropriate” (applying the test established in earlier case law).  Mr Fallahi’s unfair dismissal claim therefore failed.

Mr Fallahi, appealed against the decision arguing that the Tribunal should have looked behind the final written warning and considered the fairness of the use of the disciplinary process instead of the capability process.  He also argued that the established “manifestly inappropriate” test only applied to conduct warnings and not capability warnings.

The Employment Appeal Tribunal dismissed the appeal and confirmed that the “manifestly inappropriate” test applies to both conduct and capability warnings. The Employment Tribunal’s decision not to look at the circumstances behind the final written warning in circumstances where it did not consider the final written warning to be manifestly inappropriate was therefore the correct approach.

This case is likely to be reassuring to employers who wish to rely on a final written warning when dismissing for capability reasons. However, if an employer has both a capability and a disciplinary process, ideally, a well drafted capability process should be used for capability dismissals to prevent confusion and arguments of procedural unfairness.

Share this article