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Having to dismiss an employee due to poor performance can be difficult for any business. However, it’s not uncommon. According to research conducted by Turner Little in 2018, substandard job performance was the most common reason why 1446 British employees were dismissed over six months in 2018.
The decision to dismiss an employee due to poor performance is one of the 5 fair reasons for dismissal. However, it should not be taken lightly and only used as the last resort of a formal disciplinary procedure. Before this, managers should always try to resolve the issue informally with more positive approaches.
Learn more: The types of dismissal employers need to know about
As HR Director, Gemma Dale outlines in her blog post on how to discipline employees who are late, "over-use of disciplinary procedures can lead to damaged relationships, reduced employee engagement and have a long-term negative impact on your culture".
Dismissing an employee for poor performance: the 4 steps
In order for a poor performance dismissal to be fair, an employer will have to show that it had a reasonable belief in the employee's poor performance when making the decision to dismiss. Therefore, there must be evidence of the poor performance or the employer will struggle to show that the grounds for its belief are reasonable.
So, an employer will need to make sure that poor performance is well documented in the form of written appraisals, performance reviews and performance improvement plans (PIPs), together with evidence of the formal capability procedure that was carried out.
Learn more: What is performance management?
Step 1: Investigating poor performance
The Acas Code of Practice on disciplinary and grievance procedures states that an employer should carry out an investigation, provide the employee with the findings of that investigation, and allow them the opportunity to respond. This may involve interviewing the employee and presenting them with the collated evidence to comment on, such as:
- Employment contract and up-to-date job description
- Training records
- Performance appraisals
- Staff handbook or operating procedures
- Any previous performance improvement plan
The investigation may reveal underlying reasons for the poor performance, which the employer will need to take into account. For example, any issues which may involve fault on the part of the employer should be addressed, such as failure to provide training or poor line management. Similarly, any ill-health or medical impairment should be investigated further in case the employer needs to consider making any adjustments for disability.
Step 2: Giving the employee the chance to improve
The ACAS Code recommends that at least two warnings are given before an individual is dismissed for poor performance, unless there is gross negligence or the employee is still in their probationary period.
Related article: How to dismiss an employee on probation
What is a reasonable timescale for improvement?
The length of time required is going to depend on the circumstances and the role in question. If a capability procedure provides for a certain timescale for improvement, then this should be followed.
In the absence of timescales set out in a capability procedure, the quality and length of the employee's past service may be a relevant factor, as will the extent of the underperformance. Tribunals will focus on what was reasonable in all the circumstances.
It might make sense for an employer to link the timescale to a natural part of the business cycle, for example a quarterly sales target period.
Support or training
A failure to offer appropriate support or training might mean that the dismissal is unfair.
Reviewing progress
It will be important for the employer to keep track of the review period, because if the employer has told the employee that their performance will be monitored and discussed, it is likely to be unreasonable if the employer fails to adhere to this.
Document your performance process accurately and keep all the appraisal information you need with performance management tools as part of a HR software system.
Step 3: Poor performance hearings
A formal meeting should be arranged in the event that the employee fails to improve sufficiently. The employee should be notified in writing of the following:
- The issues or areas of concern in their performance
- The date, time and place of the capability meeting
- Summary of relevant information and any relevant documents
- The procedure to be followed
- The possible consequences if performance is found to have fallen short of the required standard
- The right to be accompanied by a trade union official or a work colleague
The hearing must be held without unreasonable delay, but also provide enough time for the employee to prepare their case. The employer should follow any relevant internal procedure for timescales.
The aim of the meeting will be to:
- Enable both employer and employee to explain their cases fully
- Give the employee an opportunity to respond and provide an explanation for the issues raised in relation to their performance
- Explore and identify the cause of the poor performance
- Determine what remedial action can be taken
- Obtain the employee's commitment to reaching the required standard
- Set a reasonable period for the employee to reach that standard
- Agree on a monitoring system during that period
- Tell the employee what will happen if that standard is not met i.e. a further warning or dismissal.
The employee should be notified in writing of the outcome of this meeting and their right of appeal, along with any time limit applicable.
Step 4: The decision to dismiss
If the employee has been given fair warning, time to improve, training and support, and any necessary adjustments, and has still failed to show signs of improvement, then the employer may feel they have no choice but to dismiss.
Ideally, an employer should consider alternative employment or demoting the employee before taking the decision to dismiss. Finally, the employer should dismiss with notice, and should offer the chance for the employee to appeal.
Read more from the myhrtoolkit blog
Wrongful dismissal: how is it different from unfair dismissal?
Written by Matthew Ainscough
Matthew Ainscough is a Fellow of the Chartered Institute of Legal Executives (FCILEx), specialising in discrimination and employment litigation. He is a Senior Associate and Head of Employment Law at law firm Taylor & Emmet Solicitors. He writes about specialist employment law topics and issues.
