How do you dismiss an employee for poor performance?

A dismissal must be ‘fair’ to be lawful.

If you want to fairly dismiss an employee for poor performance, you’ll need to go through a performance management process first, giving them chances to improve and issuing a series of warnings if they don’t reach the required standards. If you want to just get on and dismiss the employee without spending time going through a full process, you’ll need to be prepared for potential claims and/or prepared to negotiate the terms of the employee’s exit.

What is the difference between poor performance and misconduct?

Performance and conduct are often conflated, but in reality they are often very different.

Performance is about the employee’s ability to do the job, to work to the expected standards – to make x number of sales, to communicate in the appropriate manner, to give the right advice.  Performance should really be kept under pretty constant review, using an appraisal system, and line managers should be keeping an informal eye on performance levels all the time, and thinking of adding in training where appropriate. Performance matters are often long-running, slow burning, and can take a while to become a problem.  It can take a prolonged period of time to manage performance.

On the other hand, conduct is about the employee’s behaviour at work and in a work context.  Examples of poor conduct, or misconduct, include harassing other staff, sending inappropriate emails, persistent lateness, fiddling expenses, and so on.  Whilst appraisals can of course cover behavioural expectations, conduct issues are often sudden, acute in nature, and require a rapid response.

How do you manage an underperforming employee?

Actually, it’s best to deal with performance issues before they arise by having robust performance appraisal systems in place, which are utilised, monitored and serve to flag up any issues before they become terminal.

Assuming your first step is to try to get the employee to improve, rather than just dismiss, how do you approach things with them? As we set out here, it’s best to start with an informal chat with the employee, asking them questions to get them to reflect on how they are doing, where they’re falling short and where they can improve.  Provide training, especially if it’s possible that the problems are in any way caused by a lack of training or mentoring by management.

If after a few weeks or so, it’s apparent that the informal nudge hasn’t worked, you may need to go into a formal performance management procedure – more details here.  This process may eventually end with a dismissal – or with the employee improving and performing as you need them to.

An employer should follow a process before dismissing.

What are the steps to manage underperforming staff?

First, understand the problem, and the cause of the problem – you can’t do that without investigating and holding discussions with the employee and their line manager.

Second, once you’ve determined the nature of the issue, work out how serious it is – this will enable you to decide what process to follow and what level of warning (if any) to issue at the outset.

Third, decide the process you’re going to follow, and notify the employee, giving details of the process, expectations of them, and diarising meetings and catch ups, as well as the targets/achievements they need to meet.  The exact process will differ between employees who work on site, hybrid, or remotely, and where their line manager works.

It’s a good idea to have an HR professional monitoring the process and helping to run meetings (lawyers can do this, as well as giving legal advice on the business’s position and options, but HR professionals are skilled in holding difficult conversations, which will be very useful here).

Fourth, go through the process, regularly catching up with the employee, monitoring their progress, and tweaking the process as necessary.  Give credit where due – for meeting targets, completing training or whatever. Give (further) warnings where necessary – for failing to meet targets, for failing training courses at the first attempt, and so on.

Fifth, if the employee comes through the process successfully, carry on – but ensure you utilise the business’s appraisal and performance assessment systems.  If the employee doesn’t successfully complete the process, you may want to transfer them to a more suitable role (check your process or staff handbook allows for this), or even dismiss them because of their poor performance.

Can you dismiss an employee for poor performance?

Yes, but the question is whether the dismissal will be fair or unfair.

If the employee has less than 2 years’ employment, they don’t have the right to claim unfair dismissal, so there’s less risk to the employer of not following a fair procedure.

However, if the employee can come within one of the exceptions where they don’t need 2 years’ employment, they may be able to claim another form of unfair dismissal, or discrimination, or something else.  The exceptions include where the employee is dismissed because they made whistleblowing disclosures, or because of a discriminatory reason, or for exercising a statutory right.

Sometimes, the commercial solution where you’re sure the employee is wrong for the role, and they can’t come back from the performance issues you’ve noted, is to make them an offer to terminate their employment on payment of some compensation in addition to their entitlement to notice pay and accrued holiday pay. This will usually be an unfair dismissal (if the employee has more than 2 years’ service), so carries risk.

It’s important to get advice before approaching an underperforming employee with an offer to leave on agreed terms, so you can quantify the risks and potential costs involved in getting it wrong – in terms of management time, stress, hassle, disruption, reputation damage, legal costs, and potential Employment Tribunal award.

How can we help?

It can be very expensive to get it wrong.  That’s where we come in.  We can help you manage performance issues before they get beyond the point of no return.  Where there is no better commercial option than to dismiss, we can steer you through the process and help the business draw a line under the matter whilst managing risk.

Get in touch by submitting a comment below, emailing us at employment@qlaw.co.uk or calling 03300 020 863.

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