In a recent Employment Appeals Tribunal (EAT) case, a claimant was awarded €110,000 for unfair dismissal after her employer accelerated the disciplinary process against her, believing she was persistently underperforming. The EAT held that the dismissal was unfair due to the hasty manner in which the disciplinary process was fast tracked; there was a failure to afford fair procedures and no other options i.e. such as demotion, were considered.
The claimant had been employed without issue for a number of years. In 2010 the company formed the view that the claimant was not performing satisfactorily. Initially the claimant was put on a Performance Expectation Plan (PEP). A disciplinary meeting was held when the claimant failed to meet the improvements required by the PEP process. A first written warning was imposed on foot of this. A more exacting Performance Improvement Plan (PIP) was implemented. Mid-way through this process a review was held. On foot of this a further disciplinary meeting was held and a final written warning imposed as the claimant failed to meet certain targets during the PIP process. Approximately 5 months later another disciplinary meeting took place on foot of which the decision to dismiss was made. The claimant alleged the dismissal was unfair as she was not afforded adequate time to improve and meet the objectives required of the PIP process.
In the claimant's evidence she stated that her employer had a "unique" system of comparing staff group performance worldwide, in which each unit's ratings were assessed by their likeness to a template "bell curve." She stated that senior staff "calibrated" the ratings supplied by line managers to ensure conformity with the template and these calibrations could reduce a line manager's rating of an employee. A reduced rating could block the payment of an employee's bonus, affect their chances of transferring within the global company and curtail their chances of promotion. The claimant received a low ranking on this scoring system which led to her being placed on the PIP process. The claimant alleged that the scoring system was unfair, arbitrary and subjective.
The employer argued that the process of terminating the claimant's employment had been detailed, with a PEP, then PIP process and two final written warnings put in place. The EAT rejected the defence that it had dismissed her on competency grounds, saying it was "not satisfied that fair procedures were used" and that there was no evidence that the employer "considered any other option than termination". It was also critical of the lack of time afforded to the employee to try to improve her performance finding it difficult to believe that she had gone from an employee with no disciplinary record to a less than competent employee within a short space of time.
The case highlights the difficulties associated with managing underperforming employees. There is no prescribed statutory process under Irish law for managing such employees. Terminating an employee on grounds of competency is a valid reason for dismissal but is not one that is easy to establish or indeed defend.
It generally requires the employer to give the employee a number of opportunities to improve and have conducted a PIP and a separate disciplinary process. The objective of PIP is to afford the employee an opportunity to improve before the disciplinary process is instigated. In the case at hand both in the case of the PEP and the PIP process insufficient time was allocated before the disciplinary meetings were held. Another critique levied by the EAT was the failure to give an oral warning before proceeding to written warnings on both occasions. For this reason the EAT held that the dismissal was procedurally unfair and the case reiterates the ongoing and fundamental requirement of fair procedures being applied to every case where termination is a possibility.