How hard is it to dismiss poorly performing staff? Proposals in the Beecroft report to dismiss underperforming staff suggest employers currently find this impossible. However the idea that employers cannot dismiss poorly performing staff is a myth. Louise Piper of Howes Percival Solicitors gives employers guidance on what they can do now to deal with poor performers.

Fair reason for dismissal

Poor performance by an employee is a fair reason for dismissing them. The law recognises employers have the right to expect their employees perform their role to a satisfactory standard. Employers should also remember that employees do not have the right to claim 'ordinary' unfair dismissal until they have been employed for at least 1 year (if recruited before the 6th April 2012) or 2 years (if recruited on or after the 6th April 2012). This is to give employers time to decide whether an employee is suited to the job. Therefore it is advisable to set a probationary period for new recruits, stating in the employment contract that their employment can be terminated at the end of that period without following a performance management procedure. (Although for employees promoted into a new role, service in their previous position will count towards their total period of employment for unfair dismissal purposes).

Action plan

  • Investigate the problem

    Speak to the employee informally about the problem. This may reveal underlying causes such as ill health, problems with child care arrangements or a heavy workload which require further investigation or a change in working practices. Investigate the poor performance, for example check the employee's sales figures, their appraisal record and speak to the employee's line manager.

  • Formal hearing

    If the investigation shows that there are no underlying reasons for the poor performance, invite the employee to a formal disciplinary hearing. Ensure the disciplinary process follows any company procedures. At this meeting make the employee aware what the problem with their performance is, what they need to do to improve and the period for improvement (e.g. 3 months). Explore whether the employee needs any training to assist them. At the end of the hearing consider whether to issue the employee with a formal warning. Make the employee aware of the consequences of failing to improve (e.g. being issued with a final written warning).

  • Deciding to dismiss

    If after the period set for improvement, the employee's performance is still below the required standard, hold a second disciplinary hearing to consider either issuing a final written warning or terminating employment. Employees are usually given two warnings before being dismissed for poor performance. However where an employee's incompetence has had serious adverse consequences for the employer, only issuing them with one warning before moving to dismissal may be sufficient.

Avoiding Pitfalls

In addition employers should remember to:-

  • Not humiliate an employee about their poor performance in front of colleagues or customers – they could resign in response and claim constructive and unfair dismissal.
  • Act promptly – leaving the problem to fester leads to poor staff morale. A formal disciplinary process often either resolves the problem by leading to an improvement in performance or results in the employee leaving.
  • Treat employees fairly and consistently - singling out an employee for their performance when others have not been dealt with in the same way could lead to claims of constructive and unfair dismissal or even discrimination.
  • Follow the ACAS Code of Practice on disciplinary and grievance procedures – a failure to do so could result in having to pay an extra 25% in unfair dismissal compensation to the employee.