The question
An operations manager recently contacted me and requested that we terminate the employment contract of a member of his team for poor performance. The employee has 13 months service with the firm.
I advised him that we should manage the employee’s performance through the company performance management procedures, but he insists that we should proceed with terminating the employee’s employment contract.
Can you advise me what steps I should now take and what risks I should highlight to the manager if he wants to pursue a termination of employment?
The legal verdict
Esther Smith, a partner at Thomas Eggar
As the employee has over one year’s service, they have protection against unfair dismissal.
Although poor performance is potentially a fair reason to dismiss someone, you will need to show that it was the actual reason for the dismissal (poor performance records and past appraisals will provide good evidence of this). You will also have to demonstrate that you acted reasonably in taking such action, which will include proving that you followed a fair process.
ACAS provide clear guidance on what is likely to constitute a fair process. Such activity includes conducting a proper investigation, making the employee concerned aware of the problem and providing them with a realistic timeframe in which to improve, allowing them access to appropriate support and training and reviewing their progress.
The staff member also has the right to have someone accompany them to any meeting that may result in disciplinary action as well as the right to be offered a chance to appeal against any decision.
Therefore, in this case, while you can start a disciplinary process for poor performance, moving straight to dismissal would be deemed unfair as there has been no proper opportunity for the employee to improve or to address their underperformance.
In the case of underperformance, it would be usual to have given a couple of formal disciplinary warnings before considering dismissal, with adequate time being assigned in between each warning for the employee to have a real chance of making improvements.
If your company has a performance management policy that has been consistently applied in the past, it should again be employed in this instance (assuming that it is compliant with the ACAS provisions above). The issue is that, any disparity in treatment on this occasion could potentially give rise to a discrimination claim if the employee feels that they were treated differently due to their age, race, sex or any other protected characteristic defined in the Equality Act 2010.
Esther Smith is a partner in Thomas Eggar‘s Employment Law Unit.
Adam Partington, a solicitor at Speechly Bircham
Because your staff member has been employed for more than 12 months, if you terminate their employment contract for poor performance without going through a performance management process, then the dismissal will be unfair.
In order to put the company in the best position to defend against an unfair dismissal claim, you should go through a performance management process before dismissing an employee.
The company may already have a performance management process in place, which would provide guidance on the steps you need to take. It would be worth making sure that any such performance process incorporates, as a minimum, guidance provided in the ACAS Code of Practice, as failure to follow this can lead to an increase of up to 25% in any compensation awarded by an Employment Tribunal.
You should also not give the impression that the outcome of any performance management process is pre-determined. This means that it should be approached as an opportunity for an individual to improve their performance rather than as a series of measures that will inevitably lead to their dismissal (although that may be a possible outcome).
It is likewise worth mentioning that you may need to hand over written communications such as emails or provide details of conversations at some point (for example, if an individual makes a request for personal data under the Data Protection Act or as part of the disclosure process during Tribunal proceedings).
This scenario is worth considering because any evidence that shows you have already made the decision to dismiss will be used to argue that the dismissal was unfair, unless it can be adequately explained, even if you subsequently go through a fair process.
In terms of next steps, I suggest you weigh up the pros and cons of terminating the contract now against following a fair procedure, bearing in mind the above.
If the outcome is that you want to terminate without following a full performance management procedure, then you should think about using a short-form dismissal procedure. This includes setting out your performance concerns in writing, plus your evidence, before inviting the employee to a meeting to discuss them. The staff member must also be given a right of appeal.
This tack can, in some circumstances, help to stave off other, potentially more costly, allegations such as discrimination, although the dismissal would still be unfair.
Adam Partington is a solicitor at Speechly Bircham LLP.
One Response
Performance management
It is fascinating, and dismaying, to see a solicitor advising on how to dismiss someone unfairly.
Following this advice would also be spectacularly poor industrial relations, since pretty well the whole workforce would end up looking over their shoulders, thinking: am I next?