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Poor performance – or capability – is one of the five potentially fair reasons for dismissing an employee. Having a potentially fair reason is not enough – a dismissal won’t be fair unless the decision to dismiss was reasonable overall, including a fair procedure. Many capability procedures involve the issue of warnings in relation to the required improvement and timescale within which to improve. In Fallahi v TWI, the EAT has looked at whether an employment tribunal can look at the fairness of a final written warning which preceded the dismissal, as well as the dismissal itself.

Mr Fallahi was a senior project leader in technology whose employer raised issues about his performance regularly throughout his first two years of employment. An informal performance management process started on 26 January 2016. Objectives were set and specific targets scheduled for June and October 2016 and January 2017. Weekly meetings took place. In May 2016, his manager became frustrated with the lack of progress and invited him to a capability meeting where he was given a final written warning which the employee did not appeal. A further three-month review was set. After two months the employer was still not happy with the employee’s progress – after two thirds of the review period he was nowhere near meeting two thirds of his objectives. The employee was offered a month’s pay to leave or the option to return and complete the third month of review. He decided to leave, collected his belongings and left but no settlement was concluded. When asked to return to work he went off sick leave. He was invited to performance management and capability hearings but did not attend because of sickness, despite Occupational Health saying he was fit to attend. He was dismissed for capability in November 2016. The employee claimed unfair dismissal, saying the employer hadn’t properly followed its own procedures and the final written warning had been unfair.

The employment tribunal said the decision to dismiss was reasonable. Even if it had been procedurally unfair, a fair process would inevitably have led to his dismissal. The tribunal was not prepared to go behind the final written warning because it was not ‘manifestly inappropriate’. The employee appealed. The EAT agreed that the dismissal was fair. A tribunal must judge the overall reasonableness of the dismissal, not the final written warning. The warning was just one relevant factor among many in the process which led up to his dismissal. The long-term underperformance and the lack of improvement was far more relevant than the final written warning. On the facts found by the tribunal, the employer’s ability under its own procedures to move to a final written warning were in this case justified. The warning was not manifestly inappropriate and within the range of reasonable responses open to the employer at the time.

The facts of this case may sound all too familiar to some employers. This case shows just how difficult managing poor performance can be. Following your own procedures is vital, at every stage of the process, and avoids arguments being played out in the courts. This judgment also shows that a tribunal will only go behind a final written warning if it is manifestly inappropriate. The focus in an unfair dismissal case is on the dismissal, with any warnings being individual factors in the overall process followed. 

Find out how we can help.  Our partner, Jon Dunkley, heads the Wollens specialist Employment Department.  Contact him today for an informal chat, without obligation on 01271 342268 or via email at [email protected].