What Is Compassionate Dismissal?

Compassionate dismissal occurs when an employee, due to enduring health limitations, is no longer able to fulfil their role—even after all reasonable adjustments have been explored. In such cases, dismissal may be the most humane option, enabling the individual to obtain fast-track access to appropriate benefits and support systems such as Personal Independence Payment (PIP) or Employment and Support Allowance (ESA).

This approach aligns with the Equality Act 2010 and the Employment Rights Act 1996, which require employers to act reasonably and fairly when considering dismissal on health grounds.

Legal Precedents: When Employment Tribunals Uphold Fair Dismissals in Disability Discrimination Cases

Employment tribunals have consistently upheld dismissals as fair when employers prove a thorough, compassionate, and legally compliant process in managing disability-related absences or capability issues. The following cases show how employment tribunals evaluate an employer’s compassion, i.e., ‘fairness’ and ‘reasonableness’ in their decision-making:

In Mrs. M Leeks v UCL Hospitals NHS Foundation Trust (UCL) (2200214/2018), the tribunal found that the Trust had acted fairly in dismissing an employee with a
long-term health condition. UCL had made extensive efforts to accommodate the employee’s needs, including adjustments and redeployment attempts, before concluding that dismissal was necessary. The tribunal noted UCL’s reliance on occupational health advice and the transparent consultation process as key factors in its decision.

In Mr. T Mendez v Advisory, Conciliation and Arbitration Service (ACAS) (2302348/2022), the case involved claims of constructive unfair dismissal and disability discrimination. While a number of Mr. Mendez’s claims were upheld, the tribunal found that ACAS had taken reasonable steps in managing Mr. Mendez’s condition and had not acted unlawfully in the dismissal process. The judgment highlighted the importance of keeping open communication, documenting efforts to make reasonable adjustments, and the rationale behind decisions that an adjustment is not ‘reasonably practicable.’

In Mr. D Hughes v Alten Ltd (Alten) (1306316/2023), the tribunal considered multiple claims, including disability discrimination and redundancy. The tribunal found that Alten had followed a fair redundancy process and had not discriminated against Mr. Hughes on the grounds of disability. The decision emphasised the need for objective selection criteria and the inclusion of medical evidence in redundancy assessments.

These cases reinforce the principle that fairness in dismissal—particularly where disability is involved—depends on process, documentation, and empathy. Employers who engage with occupational health early, explore all reasonable adjustments, and communicate clearly are more likely to succeed in defending their decisions.

Case law demonstrates positive outcomes with early Occupational Health engagement

Impairments of Daily Living and Work Leading to Functional Disability

Functional disability can arise from a variety of impairments that affect an individual’s ability to perform daily living and work-related tasks. These impairments can be physical, cognitive, or psychological in nature, and they often result from long-term health conditions. Understanding these impairments and their impact on work is crucial for employers in making informed decisions about compassionate dismissal.

Common impairments of daily living and work include (Edemekong et al, 2025):

• Cognitive impairments: Issues with memory, concentration, problem-solving, or decision-making
• Hearing impairments: Difficulty in hearing conversations, alarms, or other important sounds in the workplace
• Manual dexterity impairments: Challenges in using hands and fingers for tasks such as typing, writing, or operating machinery
• Mobility impairments: Difficulty in walking, climbing stairs, or moving around the workplace
• Psychological impairments: Conditions such as anxiety, depression, or PTSD that affect emotional well-being and the ability to cope with work-related stress
• Visual impairments: Limitations in sight that affect the ability to read, recognize faces, or navigate the environment

These impairments can be caused or triggered by a range of long-term health conditions (Thomas et al, 2022) including:  

• Chronic illnesses: Conditions such as diabetes, heart disease, and arthritis that have a long-term impact on health and functioning
• Mental health conditions: Disorders such as depression, anxiety, bipolar disorder, and schizophrenia that impact mental and emotional well-being
• Musculoskeletal disorders: Conditions such as back pain, repetitive strain injury, and fibromyalgia that affect the muscles and joints
• Neurological conditions: Diseases such as multiple sclerosis, Parkinson’s disease, and epilepsy that affect the nervous system
• Sensory impairments: Conditions such as glaucoma, cataracts, and hearing loss that affect the senses

The Role of Occupational Health (OH)

A good OH service should work in partnership with employers to ensure that decisions around dismissal, particularly those involving disability, are grounded in fairness, empathy, and legal compliance. Multidisciplinary assessments provide clear, evidence-based insights into an employee’s functional ability, the impact of their condition on work, and the feasibility of adjustments or redeployment. A good service also supports employers in documenting their decision-making process, aligning with the expectations of employment tribunals. By combining clinical expertise with a deep understanding of workplace dynamics, a good OH service helps organisations navigate complex cases with confidence and compassion.

A good OH service should provide tailored assessments that help employers understand the full scope of an employee’s condition and the arrangements that need to be in place to remove barriers and reduce disadvantages and facilitate continued employment. Reports should include:

• Functional ability evaluations
• Clarification of any impairments, signs, symptoms, and vulnerabilities that the employer needs to understand and monitor to ensure a safe working environment
• Recommendations for occupational adjustments and support that are likely to remove barriers or reduce disadvantages
• Recommendations for adjustments that will facilitate access to and engagement with health improvement programmes
• Guidance on benefit eligibility and employability pathways (e.g., supported employment, vocational rehab)

This evidence-based approach ensures that decisions are not only compassionate but also defensible in legal terms.

Conclusion: A Pathway to Dignity

Compassionate dismissal should never be a first resort—but when all avenues have been exhausted, it can be a respectful and lawful way to support an employee’s transition. By grounding decisions in OH expertise and legal precedent, employers can uphold both fairness and humanity.