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Effective Performance Management

The aim of any performance improvement process (PIP) should be to help an employee meet the standards that are expected of them, but if their performance doesn’t improve and they are ultimately dismissed what factors will an Employment Tribunal be concerned with as to the fairness of that dismissal?

It is imperative that an employer acts reasonably towards their employees, not just during a PIP but also before any such process even begins.

Subjecting an employee to an unjustified PIP may amount to a breach of trust and confidence entitling that employee to resign and bring a constructive unfair dismissal claim - even if the PIP is expressed to be ‘informal’.  It will also be unfair to ambush an employee with allegations of poor performance at a meeting that has ostensibly been called to discuss other matters.

Capability, defined in the Employment Rights Act 1996 by reference to ‘skill, aptitude, health or any other physical or mental quality, is a potentially fair reason for dismissal, but acting reasonably is the key to successfully defending any unfair dismissal claim and the burden of proof is on the employer to demonstrate that they have done so.

When it comes to a poor performance capability dismissal an employer will first have to demonstrate that the employee knew what was expected of them.  While not every requirement of a role needs be in writing, an employer should be able to produce a written job description and regular appraisals to show that the employee was aware of the required standards.

If those standards aren’t met, a fair and reasonable PIP will include a proper investigation into the problems, making the employee aware of the concerns, giving them an opportunity to improve within a realistic timescale, providing them with appropriate support and possibly training, reviewing the employee's progress regularly and imposing warnings before proceeding to dismissal. If there is a dismissal it will usually be on notice (or with pay in lieu of notice) as it is relatively rare for poor performance to justify summary dismissal.

It is well known that employees must have at least two years continuous service to bring an unfair dismissal claim which may tempt an employer to circumvent a PIP in cases where an employee doesn’t have the requisite service but length of service is not relevant when it comes to Tribunal proceedings for discrimination.  All employees (and job applicants for that matter) are protected from discrimination.

How might issues of discrimination arise in the realm of performance management?

Employers must make reasonable adjustments to any ‘provision, criteria or practice’ that causes a disabled person to be substantially disadvantaged and this includes making adjustments to a PIP.   A failure to make reasonable adjustments will amount to disability discrimination (and a further award of damages in Tribunal).

If therefore an employee’s performance is below par because of a disability or their poor performance arises as a consequence of disability, it is imperative that this is explored further before any disciplinary sanctions are imposed and that adjustments are made where necessary.

This doesn’t mean ignoring performance problems but could instead mean allocating some of the disabled employee’s workload to others (either temporarily or permanently), giving a disabled employee more time to complete tasks, transferring them to a new role, providing modified equipment and/or providing a mentor or support worker to assist them. It will usually be sensible to seek an opinion from an Occupational Health expert as to disability and reasonable adjustments in these circumstances.

If ill health is behind poor performance, the general principles of reasonableness still apply however a different procedure should be followed in order to ensure a fair outcome.


Case law in this area (and in most areas of employment law) is always fact sensitive which is why it is so important to seek legal advice on any given situation before taking any steps that could lead you into costly and time consuming litigation.

If you need advice on any aspect of employment law, please call Samantha Dickinson or Martin Williams on 01273 223252.