Dealing with poor performance: frequently asked questions

Caroline Noblet of Squire Sanders Hammonds concludes a series of articles on dealing with poor performance with some frequently asked questions that consider, among other things, the procedure that employers should follow when dealing with poor performance and for how long warnings for poor performance should remain active. 

Should an employer deal with an employee's poor performance through its disciplinary or capability procedure?

Whether an employer should deal with an employee's poor performance through its disciplinary or capability procedure will depend on the nature of the poor performance. The employer will need to carry out an investigation, which will include meeting with the employee concerned, to establish whether the employee's poor performance is conduct or capability related. If it is conduct related (ie the employee has some control over his or her actions), it is appropriate for the employer to follow its disciplinary procedure. However, if the employee's poor performance is capability related (ie he or she does not have control over his or her failure to meet the employer's standards of performance), it will be appropriate for the employer to follow a capability procedure for performance management.

It is not always obvious whether an employee's poor performance is due to capability or conduct. In some cases it will be a combination of the two. The employer may need to adopt the procedure that appears to it to be the most appropriate, and change course if the evidence that emerges suggests that this is necessary. Irrespective of which procedure the employer follows, it should comply with the Acas code of practice on disciplinary and grievance procedures (PDF format, 1.58MB) (on the Acas website).

Is an employee entitled to be accompanied at a meeting to discuss poor performance?

An employee will be entitled to be accompanied at a meeting to discuss poor performance only if the meeting could result in the employer taking formal disciplinary action against him or her (for example by issuing the employee with a formal warning, dismissing him or her, or invoking some other penalty). The statutory right to be accompanied (under s.10 of the Employment Relations Act 1999) to a disciplinary meeting does not apply to a performance review meeting that will not result in formal action, but employers may choose to allow this if the employee requests it. If the employee does have the statutory right to be accompanied, he or she is entitled to be accompanied only by a fellow employee or trade union official and not by a partner, friend, relative or lawyer.

Where there are special circumstances, for example the employee has a disability or is particularly stressed by the situation, the employer should consider allowing him or her to bring someone to the meeting, regardless of whether or not formal action may result and the statutory right applies. An employer that allows an employee to be accompanied when this is not a statutory requirement may be found to have made a reasonable adjustment under the disability discrimination provisions in the Equality Act 2010, should they come into play.

What is a reasonable review period when setting targets for an employee who is underperforming?

There is no statutory time frame for improvements for underperformance. Timescales for an employee's improvement must be reasonable and will depend on the circumstances, including the employee's role and position with the employer and his or her length of service and past performance. In some cases, a review period of a few weeks may be sufficient. In others, a review period of several months may be more appropriate. Where an employer agrees to provide an employee with additional training or support, this will need to take place before the employee's performance can sensibly be measured again. The employer should ensure that it monitors the employee's performance during the relevant review period. The period should be long enough to enable the employer to assess whether or not the employee has made and sustained the necessary improvements.

For how long should warnings for poor performance remain "live"?

The starting point in determining for how long a warning for poor performance should remain "live" is to look at the employer's procedure. According to the Acas code, employers should set out the period for which warnings will remain active. The non-statutory Acas guide: discipline and grievances at work (PDF format, 898K) (on the Acas website), which accompanies the code, states that warnings should normally be live only for a set period, for example six months for a first written warning and 12 months for a final written warning. The guidance does not rule out the possibility of an unlimited warning, although it will not normally be appropriate to issue an open-ended warning in a poor performance situation. If further underperformance occurs during the currency of a warning, the employer is able to take the warning into account when deciding what penalty to impose on the next occasion.

In most cases, once a warning has expired, it should not be taken into account by the employer when it is deciding the outcome of future poor performance proceedings. However, in Airbus UK Ltd v Webb [2008] IRLR 309 CA, the Court of Appeal held that, in the context of a misconduct dismissal, employers may take into account expired warnings where this is not the principal reason for a subsequent dismissal (ie where the circumstances would have justified dismissal anyway). If, for example, an employee has a current final written warning for poor performance, and performance has not improved since the employer issued the warning, the employer might be considering dismissal (as it would be entitled to do as the employee's performance has not improved) or extending the final written warning if there are mitigating circumstances. On the basis of Airbus, it may take into account the previous expired warning in deciding that the mitigating circumstances do not warrant the lesser penalty.

Do employers need to consider alternative work before dismissing an employee who is underperforming?

There is no specific statutory requirement for employers to consider alternative work for an employee who is underperforming. However, in the event that a dismissed employee brings a claim for unfair dismissal, the employment tribunal is likely to take into account whether or not the employer made a reasonable effort to find alternative employment to avoid having to dismiss, when determining if it acted fairly. Employers should consider available alternative employment for employees who are unsuitable for their existing position due to their poor performance and who have not responded satisfactorily to warnings, counselling and/or training. Alternative work should be a last resort to avoid having to dismiss; it is not something that the employer should broach at the start of the performance improvement process. That the alternative employment on offer may be of a lower status and/or pay does not necessarily mean that the employee facing dismissal will deem it unacceptable. Employers should also consider alternative work on a group-wide basis, where applicable, particularly if the employee in question is flexible as to where he or she is prepared to work.

Unless there is a clear express contractual term entitling the employer to demote the employee or vary his or her role, it will need to obtain his or her agreement to the alternative work.

Can an employer dismiss an employee for a one-off act of poor performance?

Employers should not normally dismiss an employee for a one-off act of poor performance. In most cases, for a poor performance dismissal to be reasonable, the employer will need to have issued warnings previously, particularly as incapability is usually assessed over a period. The Acas code recommends that employers give at least two warnings before they dismiss for poor performance. Having said that, if an employee is a new recruit, and particularly if he or she is still on probation, the employer may decide to dismiss him or her without issuing warnings. This is unlikely to create a problem for the employer provided that the employee does not have sufficient service to bring an unfair dismissal claim (namely one year's service, increasing to two years' service from 6 April 2012), and has no basis for claiming that the dismissal amounts to unlawful discrimination or is for one of the automatically unfair reasons for dismissal for which there is no service requirement (see Fairness in the circumstances in the Unfair dismissal: rights on termination section of the XpertHR employment law manual for more details).

It may be lawful to dismiss for a one-off act of poor performance if it constitutes a very serious case of negligence endangering life or limb. In Taylor v Alidair Ltd [1978] IRLR 82 CA, the Court of Appeal held that it was fair to dismiss an airline pilot whose negligent landing put the lives of passengers at risk. His actions amounted to gross incompetence and could have led to calamitous consequences. The airline was entitled not to take the risk of a recurrence.

If an employee has a really bad attitude, is this a conduct or capability issue?

An employee's bad attitude could amount to a conduct or capability issue, or both. If an employee is being deliberately antagonistic or wilfully ignoring guidance or instructions on a particular point, this will normally constitute misconduct. However, if this bad attitude is caused by stress because he or she is struggling to carry out the role due to a lack of training and support, or by a genuine failure to understand what is required, it could be a capability rather than a conduct issue. Sometimes the distinction between conduct and capability is not clear cut. However, if an employer merely attaches the wrong label to an employee's poor attitude, this will not necessarily result in a subsequent dismissal being found unfair, provided that the employer made clear to the employee the extent of the problem and he or she was given a chance to address it.

In the event that an employee is displaying a poor attitude, his or her manager should sit down with him or her, initially on an informal basis, to discuss the matter. The manager should set out examples of the employee's poor attitude, for example where he or she has been rude or dismissive to colleagues or clients, rather than simply accusing him or her of having a bad attitude. The employee may be unaware that he or she is perceived as having a bad attitude and the employer raising the issue may be all it takes to bring about a change. This conversation may also reveal the reasons for the employee's bad attitude, which may be something that the employer can address.

The next topic of the week article will be the first in a new series on constructive dismissal and will be published on 5 December.

Caroline Noblet (caroline.noblet@ssd.com) is a partner at Squire Sanders Hammonds.

Further information on Squire Sanders Hammonds can be accessed at www.ssd.com.