An employee who is consistently underperforming can have a detrimental effect on an employer’s business. Not only will poor performance affect an individual’s productivity, it can undermine team morale and the productivity of the organisation, as well as sucking up management time and resources. Unfortunately, in many circumstances, an employer is left with no choice but to dismiss an employee for poor performance.
Often, performance issues are allowed to run on for far too long because managers are not confident about dealing with such issues, so they delay having a difficult conversation. However, this dread is perhaps misplaced. Depending on how long your employee has been employed for, if you follow the correct procedures, dealing with poor performance at work shouldn’t be too difficult.
The key is to give yourself enough time to carry out the process properly. An employer will be well protected against a possible legal claim from the employee if they follow the correct procedure. This means understanding the steps which must be gone through, and carrying them out appropriately without rushing.
Work on improvement rather than dismissal
A successful performance management process would see the employee improve and become a useful member of the team. It is crucial to give the individual enough time and support to allow this to happen. In reality however, the outcome is often a failure to improve, leaving the employer with no option but to dismiss.
How long has your employee been employed?
If your employee has been employed for two years or more, they will be protected against unfair dismissal and will be able to bring a claim in the employment tribunal if that right is breached. A dismissal will be unfair if the employer fails to follow the correct procedure in carrying it out.
Employees with less than two years’ employment cannot generally bring a claim for unfair dismissal, so the procedure is slightly different.
Employees with less than two years employment
Even if you are dismissing an employee for poor performance within the first two years of their employment, it is still good practice to follow a reasonable procedure before dismissal.
Remedying poor performance
There are a number of basic elements to any fair process when it comes to performance management, which all employees must strive to adhere to.
In order to prevent employee poor performance, it’s sensible to enforce a probation period in order to assess new employees. A probationary period of between three and six months provides a good opportunity to review performance and take any appropriate action if necessary.
The employee must understand what is expected of them, and the standards they are expected to meet must be clearly spelled out. If an employee is given targets, these should be realistic and based on their skills and experience. Also, employees should be given a realistic time-frame to achieve any targets and should understand any deadlines the employer is putting in place.
It is the employer’s responsibility to ensure that all employees are given adequate support to achieve their targets and/or the standards expected of them and this will encompass proper training. A comprehensive induction processes for new employees can save a multitude of problems at a later stage.
If performance is felt to be lacking, then an employer needs to explain what needs to change in order to meet the required standard of performance – for example, some individuals may need extra training or support.
Underlying reasons for poor performance
Employers should take note of the fact that there may be an underlying reason for poor performance. An employee may not even be aware themselves that they have additional needs if, for example, they are an undiagnosed dyslexic.
If an employee is disabled within the meaning of the law, an employer has an enforceable duty to make reasonable adjustments for them to enable them to do their job.
Once any additional support or training is put in place then an individual must be given enough time to prove themselves.
Performance reviews should be arranged regularly, and these agreed dates stuck to. It is important to give feedback so that the employee knows whether or not they are improving as required.
If dismissal is a potential outcome, then the employee should be warned that this is a possible consequence of a failure to improve.
How to proceed if employee’s performance remains poor
If, despite best efforts, it seems likely that the employee’s performance is not going to improve, then whether or not to dismiss them will have to be discussed.
Firstly, you must check the relevant contract of employment. Is there a term in the contract that sets out the dismissal procedure to be followed and, if so, have you complied with it? If there isn’t, then you have more flexibility.
While you don’t strictly need to give any prior warnings of dismissal or a right to appeal (unless it’s provided for in the contract of employment) for employees with less than two years service, it is considered good practice.
Make it clear in the termination letter why you have dismissed them and give either appropriate notice or payment in lieu of notice.
Employees with 2 years employment or more
Employees with at least two years’ service are protected against unfair dismissal. Therefore, in order to dismiss fairly, an employer must:
- have a fair reason for the dismissal
- act reasonably in treating that as a reason for dismissal in each case
- follow a fair (formal) procedure in carrying out that dismissal
Reason for dismissal
Capability (or more accurately, lack of it) is a potentially fair reason for dismissal, so make it clear that this is the basis upon which you are dismissing in any termination meeting and letter.
Make sure you have evidence of consistent underperformance and all the measures that have been put in place to assist the employee in trying to improve. For example, what training and mentoring did they receive? Did the employee’s manager have an informal meeting with them to try and encourage the employee to improve their performance?
Ensure you have documents on file to show that adequate warnings were given to the individual. Notes of any meetings held under the formal procedure must be kept on file.
Fair procedure – the formal process
The ACAS Code of Practice on disciplinary and grievance procedures will apply, so make sure you follow its recommendations for a fair procedure.
Let the employee know that you are commencing the formal disciplinary process (or capability process if you have a separate process) and give them a copy of it for reference.
It is vitally important that the employee is informed of their rights and is allowed to bring a work colleague or trade union representative to all meetings held under the formal procedure.
At each stage of the procedure, you should write to the employee and explain that their performance is considered to be below the required standard and why. Make it clear that this letter is part of the formal disciplinary procedure (and which stage it is at) and invite the employee to attend a meeting to discuss it. The employer must also explain what the potential consequences are i.e. a formal warning or dismissal.
At any formal meeting, give the employee an opportunity to respond to the issues. You can also collaboratively explore ways to help the employee improve their performance and try to agree some targets and time scales. Keep a written record of the meeting and give a copy of this to the employee.
If, following the meeting, a formal warning is given, remember to include the fact that your employee has a right to appeal against the decision.
Unfortunately, there will be situations where the employee fails to improve their performance either enough or at all. If, at this stage, you consider the only option is dismissal, you need to invite the employee to a meeting to discuss their dismissal. Explain in writing in advance the purpose of the meeting and the possible outcome, reiterate the performance issues and remind your employee that they have a right to bring someone to the meeting with them.
Ideally, the decision to dismiss an employee will be given face to face with reasons identified and explained. Following this, the employee should be given a copy of the decision and reasons for it in writing, along with notifying the employee of their right of appeal.
Don’t forget to state whether the employee is being dismissed on notice or with payment in lieu of notice.
If you would like more advice on your legal rights as an employer, or how to properly dismiss an employee for poor performance, please get in touch with one of our employment law specialists who will be happy to guide you further.