One of the five potentially fair reasons for dismissing an employee under section 98 of the ERA 1996 which the employer must establish to show that an employee was not unfairly dismissed. To ensure that such a dismissal is fair, an employer must demonstrate it acted reasonably in relying on capability as the reason for dismissal and followed a fair procedure to establish whether the employee was "capable" of doing their job by reference to skill, aptitude, health or any other physical or mental quality.

For more information on dismissing an employee on the ground of capability, see Practice note, Unfair dismissal: overview: Capability or qualifications.