Poor Performance Dismissal

Poor Performance
Dismissal

A dismissal for poor performance is one that is due to the employee’s inability to perform the job to the standard expected by the employer. The employer must prove that it genuinely and reasonably believed that the employee was incompetent; it need not prove that the employee was actually incompetent. Dealing with the issue of substantive fairness, the employer must satisfy the following requirements as set out in British Home Stores Ltd v Burchell [1978] IRLR 379 (known as ‘the Burchell test’):

1. The employer had an honest belief that the employee was not capable of performing the job.

2. Such a belief was held on reasonable grounds, and

3. In forming such a belief, the employer carried out a reasonable investigation (which should involve giving the employee the opportunity to respond to the criticisms).

To demonstrate that the employer’s belief was reasonable, the employer should produce evidence, including the honest views of the employee’s manager(s), complaints by customers and colleagues, or a drop in sales figures (where relevant).  The employee may be able to prove the employer’s belief was not reasonable, by presenting evidence of above-average sales figures, good appraisals, or that he/she was overworked.  

The tribunal will consider whether the decision to dismiss and the investigation fell within the band of reasonable responses. It is important to remember that the tribunal cannot substitute its own view on whether the employee was a poor performer; the employer only needs enough evidence to show its belief was honest and reasonable.

The Investigation

It is essential that the employer has reached its belief about the employee’s competence, having carried out adequate investigation. This is also relevant to the question of procedural fairness.  The employer should ensure it follows its own procedure (if it has one), in addition to the ACAS Code. 

• The first key, “Establish the facts of each case”, emphasises the importance of an adequate investigation. 

• This should involve meeting with the employee to ask questions about the reasons for the poor performance, discuss any evidence obtained, and allow them the opportunity to respond.

• The investigatory meeting should be a fact-finding opportunity; not a disciplinary exercise. 

As a result of the investigation, the employer may decide to take no further action or to hold a formal hearing, which may result in a written warning that the employee must improve.  The employee should be given clear guidance on how to improve, the standards expected of them/, and the timescale within which to improve.  

ACAS Code

The ACAS Code recommends that at least two warnings be given before an individual is dismissed for poor performance, unless there is gross negligence. The employer should ideally offer support and re-training where appropriate; the amount of this will depend on the size of the employer and the resources available to it. In the context of following the ACAS Code and any company procedure, the steps will include arranging to:

a) appraise the employee;

b) warn of the consequences of not improving;

c) give the employee a reasonable opportunity to improve; and

d) In most cases, repeat the warning process at least once, perhaps more often.

The tribunal may also take into account whether the employer had any alternative roles within the organisation for which the employee would be suitable and competent. However, employers are not required to offer less demanding roles to employees because of their capabilities; each case will depend on its own facts.

Really a Capability Dismissal

Dismissal due to poor performance is considered a capability dismissal and is a potentially fair reason for termination of employment. "Capability" for unfair dismissal purposes encompasses an employee's skill, aptitude, health, or any other physical or mental quality relevant to performing their job. Therefore, poor performance is a direct reflection of an employee's capability to do the work they were employed to do.

For a dismissal based on poor performance to be deemed fair, an employment tribunal will apply the "range of reasonable responses" test. This objective test requires the tribunal to determine whether the employer's decision to dismiss the employee fell within the range of responses that a reasonable employer in similar circumstances and in that business might have adopted. The tribunal must not substitute its own view for that of the employer; its role is to review the reasonableness of the employer's actions based on facts known at the time of dismissal. This test applies to both the decision to dismiss and the investigation and procedure that led to it.

Substantive Fairness

To ensure procedural and substantive fairness in a poor performance dismissal, employers generally need to consider several factors:

Employee Awareness

The employee should be aware of what is required of them.

Problem Identification

There should be a proper appraisal of the employee, and the problem should be clearly identified.

Reasonable Investigation

The employer must carry out as much investigation as is reasonable in the circumstances. This includes establishing the facts of the case.

Support and Development

The employer should provide training, supervision, and encouragement where appropriate.

Warnings and Opportunity to Improve

The employee should be warned about the consequences of failing to improve and be given a reasonable chance to do so. It is unlikely that a single act of poor performance will warrant dismissal, unless it is a role where a single mistake could lead to major consequences (e.g., pilot, nuclear scientist, train driver).

Consultation and Representations

The employee should be informed of the issues in writing and allowed to make representations, usually at a meeting or hearing.

Right of Appeal

The employee should generally be allowed a right of appeal against the decision. A failure to allow an appeal is relevant to procedural fairness but does not automatically render a dismissal unfair.

Consideration of Alternatives

In some cases, the employer should consider alternatives to dismissal, such as offering alternative employment.

Failure to Adhere to Acas Code

The Acas Code of Practice on Disciplinary and Grievance Procedures (Acas Code) is particularly relevant for dismissals due to poor performance, as it explicitly applies to "disciplinary situations" which include misconduct and poor performance. Tribunals must take the Acas Code into account when deciding if an employer acted reasonably. While failure to follow the Acas Code will not in itself make a dismissal unfair, an unreasonable failure can lead to a tribunal increasing or decreasing a compensatory award by up to 25% if it is just and equitable to do so. The Acas Code sets out key steps like establishing facts, informing the employee, holding a meeting, allowing accompaniment, deciding on action, and providing an appeal opportunity. The non-statutory Acas guide also offers further guidance.

Conclusion

It's important to distinguish poor performance from ill-health dismissals, which are also under the capability umbrella but have specific considerations related to medical evidence and disability discrimination. While the Acas Code does not directly apply to ill-health dismissals, general principles of procedural fairness and the accompanying Acas guide on managing long-term absence remain relevant.