Fair Procedures in Relation to Performance Issues - A Test for Employers
As Google recently discovered, when a former employee was awarded €110,000 by the Employment Appeals Tribunal (“EAT”), dismissing an employee on the ground of performance is very tricky. A fair procedure would usually take approximately six months from the initiation of a Performance Improvement Plan to disciplinary sanction of dismissal and the process is very time-consuming. For this reason, a number of employers tend to find an alternative ground to dismiss the underperforming employee.
While it is not the function of the EAT in an unfair dismissal case to determine whether or not the employee was competent to perform his job, it will determine whether or not the employer had an honest belief that the employee was incompetent for the job and whether the grounds for the employer’s belief were reasonable. The starting point in any performance case is the standard against which the performance is measured. An employee can only be charged with poor performance after he has been made aware of the standard that is required. However, there are many employments in which an employee will be expected/assumed to be aware of the standards that are required of him from the commencement date. Nonetheless, it is vital for an employer to point out to the employee that he/she is falling short of the requisite standard before it becomes a disciplinary issue. It must be remembered that the standard imposed by the employer must be a reasonable standard having regard to all the circumstances.
‘Reasonableness’ is demanded of an employer from the outset when dealing with performance issues. Performance issues should be discussed with the employee in a non-contentious fashion. The employee should be clearly advised of the required standard that is not being met and should be offered all reasonable assistance and time with a view to enabling him/her to meet that standard. This is usually done by use of a Performance Improvement Plan (“PIP”). The document should set out clearly the different objectives that the employee is not meeting and is required to meet and the different time scales within which the employee is to meet each objective. The employer should go through this document with the employee to ensure that he/she fully understands it and to notify the employer where the employee feels that he/she will either need assistance, training or more time to meet the objective. The employer must also ensure that the employee’s work situation allows the employee to focus on improving. Regular review dates should be set during the PIP period and the employee should be informed that should he/she not meet the interim improvement deadlines set out in the PIP that the disciplinary process will be initiated and that sanction, if any, may be up to and including dismissal.
Obviously, an employer will be expected to follow its disciplinary procedure and, therefore, will usually be required to go through the sanctions of verbal and written warnings before dismissal. In the Google case, the EAT criticised the company for not considering an alternative to dismissal such as demotion, even though it had gone through all the stages of their disciplinary process.
It is evident from case law that for an employer to fairly dismiss an employee on the basis of under-performance, the employer must act reasonably, offer support and time, adhere to procedures and only proceed to dismissal as a last resort. In order for any employer to do this, it needs to regularly review employees’ performances and address any performance issue at an early stage. Often employers leave it too late and neither have the time nor the patience to follow the correct process required. Therefore performance based dismissals are not ideal if the employer has reached a point where it wants the employee terminated regardless.