Many employers are at risk of disputes related to disability discrimination. Ministry of Justice statistics show that employment tribunal claims increased by 39% in 2025-26. Disability discrimination accounted for 16% of jurisdictional complaints received in the final quarter of that year, up from 13% in the equivalent quarter of 2024-25.

Employers often find that when they raise concerns about an employee’s performance and start a performance improvement plan (PIP), the employee goes off sick or says that a health condition is affecting their performance. This can complicate and delay the performance management process and expose the employer to accusations of disability discrimination.

From 1 January 2027, all UK employees with six months’ continuous service will have the right to bring an unfair dismissal claim. With this significant change, employers need to revisit performance management and introduce tighter controls to mitigate risk of litigation.

Does sickness absence bring a PIP to an end?

There is no legal obligation to end a PIP because an employee is absent through sickness or raises a health condition. Instead, the employer must decide if and how the process can continue fairly. They will need to consider if medical evidence is needed and whether the process or the employee’s role should be adjusted.

The employer should first understand the employee’s position by answering these questions:

• What health condition does the employee say they are suffering from?
• How do they say it affects their work?
• Does it explain all or only some of the concerns the employer has with the employee’s work?
• Is the employee able to participate in meetings?
• What support does the employee say they need?

The timings of when the illness was disclosed is relevant, but it should not determine the employer’s response. The employer can still address performance concerns that arose before the sickness absence. Though, once the employer is aware that health may be affecting an employee’s performance, they should investigate the medical situation before making any decisions.

This process should involve obtaining occupational health or other medical evidence. Any occupational health referral should clearly explain the employee’s duties, the employer’s performance concerns, the PIP process and the employee’s prognosis.

It may be sensible to pause the PIP while waiting for that evidence. Alternatively, the PIP could continue with adjustments such as remote or shorter meetings, written submissions or a longer review period. An open-ended suspension will rarely be necessary.

Where can disability discrimination arise?

A mental or physical health condition may amount to a disability under the Equality Act 2010 where it has a substantial and long-term adverse effect on the employee’s ability to carry out normal day-to-day activities. A formal diagnosis is not needed but if a medical condition could amount to a disability, it is advisable to seek medical or occupational health advice.

If an employer knows, or could reasonably be expected to know, that the employee is disabled and is at a significant disadvantage as a result, it has a duty to take reasonable steps to remove or reduce that disadvantage. In a PIP, the duty may be triggered by the performance standards, review period, method of assessment or way in which meetings are conducted.

The employer should identify the disadvantage, discuss it with the employee and consider relevant medical evidence. It must then assess possible adjustments, rather than relying solely on the employee to propose them. Adjustments might include additional supervision, clearer written instructions, changes to duties or working arrangements, a different method of assessment or an extension to the PIP.

Whether an adjustment is reasonable will depend on its likely effectiveness, practicality, cost, the employer’s resources and operational impact. The employer does not need to remove the essential requirements of the role or lower standards indefinitely but should record the adjustments considered and its reasons for accepting or rejecting them.

An additional risk of discrimination arises where an employee is treated unfavourably because of something resulting from their disability, such as absence or reduced output. This will be considered unlawful unless the treatment can be objectively justified.

What if an employee uses AI to respond to a PIP?

Employees are increasingly using generative AI to respond to PIPs, air grievances and allege disability discrimination. These documents are often lengthy and legally framed, but may be repetitive, internally inconsistent or based on an inaccurate understanding of the law. As employees may view the content as authoritative, they may feel more confident about making allegations that have not been properly tested and, in some cases, pursuing them through an employment tribunal.

For employers, the practical difficulty is the disproportionate amount of management and HR time needed to work through such extensive correspondence and formulate a response. There is also a risk that the volume of material distracts from the performance concerns and the employee’s actual circumstances.

Employers should not disregard a response because they suspect that AI has been used, but nor must they accept the employee’s framing of the issues or give responses that are as lengthy as the employee’s assertions. The appropriate approach is to:

• Identify the material allegations
• Clarify any unclear or contradictory points
• Ask the employee to explain how the health condition affects them personally
• Ask the employee to set out how the adjustments sought would assist their performance.

The response should then address the substantive issues clearly and proportionately, while keeping the underlying performance or capability process on track.

How will unfair dismissal changes affect performance management?

From 1 January 2027, the period of continuous employment required before an employee can make an ordinary unfair dismissal claim will reduce from two years to six months and the statutory cap on compensatory awards will be removed. Employers will have much less time to identify and address performance concerns before unfair dismissal protection applies, and face greater financial exposure if a dismissal is found to be unfair.

These changes are likely to place greater emphasis on active performance management, particularly during probationary periods and the early stages of employment. In turn, employers may more frequently come across the situation outlined above, in which the start of a PIP leads to an employee going off sick or claiming that their performance issues are connected to a disability. The associated risks are therefore likely to increase.

Employers should review their performance and capability procedures now, but updating policies alone is not enough. Managers must understand how to recognise when a performance process has a health or disability dimension, when the matter should be escalated to HR and when occupational health or other medical input is required.

Training should also cover how reasonable adjustments are assessed and how a PIP may continue fairly during sickness absence. Employers should test their procedures in practice to make sure that concerns are addressed promptly, decisions are properly documented and capability processes do not remain unresolved for extended periods.

If you need support reviewing your performance management processes or managing the employment law risks associated with sickness absence or disability, please get in touch with Charlie Barnes or your usual RSM contact.

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