Capability (Ill-Health) vs. Disciplinary Procedures

How to Handle a Capability (Ill-Health) Procedure or Its Appeal When You Don’t Meet the Equality Act Definition of Disability

Introduction

Capability (ill-health) procedures are one of the most overlooked areas in employment law. Even experienced lawyers sometimes miss the practical traps that arise when an employee is not considered “disabled” under section 6 of the Equality Act 2010. Employers often believe this gives them a free hand to dismiss, but the truth is very different.

At UDO, we see time and again that employees are told by occupational health that disability is “unlikely” and, shortly after, are pushed through late-stage capability procedures. Most end in dismissal. But being “not disabled” does not strip away your protection. Employers still owe duties under the Employment Rights Act 1996 and the Health and Safety at Work etc. Act 1974. This post explains how to approach capability procedures (or their appeal) so you can protect your position and, if necessary, build a strong case for unfair dismissal.

Section 98 ERA 1996 — The Key to Fairness

• What the law says: Section 98(2)(a) ERA allows employers to dismiss fairly for “capability.” But section 98(4) requires tribunals to ask whether dismissal was reasonable in all the circumstances, considering the employer’s size, resources, and alternatives to dismissal.

• In practice: Even if you are not disabled under the Equality Act, your employer must still consider postponement, support, or redeployment before deciding to dismiss.

📌 Practical tip: If you suffer frequent short absences (e.g. colds made worse by working in cold storage), identify alternative roles in the business that may improve your attendance. If your employer refuses to consider them, they may fail the fairness test under s.98(4).

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The Role of Occupational Health

• What the law says: OH assessments are standard in capability cases, but advisers rarely confirm disability. They usually state whether you are “likely” or “unlikely” to meet the definition.

• In practice: Employers often jump straight to dismissal once OH says “unlikely disabled.” This is flawed if they fail to revisit OH when new risks or adjustments are raised. Adjustments are not required only becasue of disability.

📌 Practical tip: Don’t refuse alternative roles outright. Instead, raise concerns that should trigger further OH review. Example: If offered a role requiring latex gloves and you have an allergy, mention “safe equipment and systems of work.” If offered heavy lifting after long absences, mention “manual handling and safe storage.” If the employer doesn’t postpone for OH input, your unfair dismissal case strengthens.

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Health and Safety at Work etc. Act 1974

• What the law says: Section 2 requires employers to ensure, so far as reasonably practicable:

  • Safe systems of work and training

  • Safe handling and storage of materials

  • Safe workplace conditions

  • Adequate welfare and environment

• In practice: These duties apply to all employees, regardless of disability.

  
  

📌 Practical tip: Raise H&S risks during capability meetings. If ignored, this not only weakens the employer’s fairness defence under ERA but may also support your position in disciplinary proceedings where “insubordination” is alleged. Refusing unsafe work is not misconduct if the refusal is reasonable.

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Standard Procedure and Common Grounds for Unfair Dismissal

1. Invitation Letter

   • Must state the reason for the hearing and the possibility of dismissal.

   • If dismissal is not mentioned, you may argue inadequate notice.

     📌 Practical tip:  Check your letter carefully. If it only talks about “discussion” but not dismissal, raise that lack of notice in your appeal.

   
   

2. Access to the Policy

   • The capability policy should be provided.

   • If not, you may argue lack of transparency and inability to prepare.

     📌 Practical tip: Always request a copy of the relevant policy before the hearing.

     
     

3. Right to Respond

   • You must have a genuine chance to put forward your case.

   • Comparators (how other employees were treated) can show inconsistency.

     📌 Practical tip: Gather examples of colleagues with similar absences who were treated differently.

     
     

4. Outcome and Right of Appeal

   • A dismissal letter must clearly state the right of appeal.

   • Failure to provide it is itself a procedural flaw.

     📌 Practical tip: If your dismissal letter does not mention appeal rights, note this immediately—it can support your claim.

     
     

5. Policy Terms

   • If the policy is clearly linked to your contract, breaching it may be a breach of contract.

   • Even if non-contractual, tribunals expect employers to follow their own policies consistently.

     📌 Practical tip: Compare what the policy says with how your case was handled. Any gap can be grounds of challenge.

     
     

6. Dismissal Decision

   • If your outcome letter simply says your health was considered irrelevant because you are not disabled, that is evidence of unfair dismissal.

     📌 Practical tip: Keep all documents. A tribunal will want to see if the employer gave proper consideration to your health, regardless of disability status.

Final Thoughts

Capability (ill-health) dismissals are often mishandled. Employers too often confuse the absence of an Equality Act duty with the absence of all duties. But tribunals look closely at process, fairness, and health and safety. By preparing carefully—raising alternatives, pointing out risks, and keeping the focus on section 98(4) ERA—you protect yourself from unfair treatment and strengthen any appeal.