Definitions, thresholds LOW PERFORMANCE MANAGEMENT Files... · LOW PERFORMANCE MANAGEMENT...

LOW PERFORMANCE MANAGEMENT

Definitions, thresholds and recordkeeping

What marks out an employee as a low performer?

Is there an objective measure of low performance compared

to other employees?

Does low performance need to be documented? If so,

at what level of detail?

Performance Management

What are the standards and processes for performance

management?

Justification for dismissal

How can an employer justify dismissal?

General requirements for termination

Claims against the employer

What kind of claims can the employee make?

Belgium - Brazil - France - Germany - Italy - MexicoNetherlands - Poland - Russia - Spain - United Kingdom United States

IUS LABORIS - LOW PERFORMANCE MANAGEMENT

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Poland

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Spain

United Kingdom

United States

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Summary

Date of publication: January 2016 - This publication does not constitute legal or professional advice in any way and it should not be acted upon without consulting a legal counsel first.


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There is no definition of low performance. Broadly, an employee will be

classified as a low performer if his or her performance does not meet the

employer’s standard.

Low performance can manifest itself in different ways, as follows:

the task has been done on time but the quality of the work is

inadequate;

the quality of the work is adequate but the quantity is insufficient.

The required quantity and quality of work is determined by the employer and

could form part of the employment contract. However, generally there will be

no contractual clause about this and no written instructions in correspondence

from the employer. It is essential to note that an employee – unlike, for

example, an entrepreneur – is not required to be successful or to perform

to an objectively determined standard, but simply to perform. Therefore, the

employee must perform his or her duties with care, using the skills at his

disposal, but that is the limit of what the employee is required to do.

Is there an objective measure of low performance compared to other employees?

Although most employers in Belgium evaluate and assess their employees

on a regular basis, there is no legal obligation to do so. Belgian employment

law does not make any distinction between high and low performers and

this is why there are no legal provisions about this. The effect of this is

that there is no objective legal procedure for measuring an employee’s

performance. There is also no relevant case law. In practice, the evaluation

and assessment process will be largely a matter for the employer.

Does low performance need to be documented? If so, at what level of detail?

Strictly speaking, there is no legal obligation to document an employee’s

performance (whether good or bad). If an employer wishes to make

important decisions based on an employee’s performance, such as giving an

employee a salary increase or bonus, promoting the employee or terminating

the employment contract, it might be in the employer’s interests to keep

relevant documentation so as to avoid future discussions.

It is also sensible for the employer to retain as much evidence as possible if

it decides to dismiss an employee, so that it can defend any claim that arises

for ‘manifestly unreasonable’ dismissal.


What are the standards and processes for performance management?

There are no statutory standards or processes in Belgian law relating

to performance management. But that does not mean performance

management is not done. In fact, it is widespread and is done to assist

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employers in making decisions concerning promotion, pay increases,

transfers and terminations. Employees who reach their goals can be

rewarded through pay raises or promotions and employers can withhold

rewards from employees who do not meet their objectives.

Most commonly, the performance of an employee is measured in goals

achieved through performing work tasks. The advantage of this is that it is

an objective way of measuring performance: either the goal was achieved,

or it was not. Employers can easily demonstrate that individuals’ results were

below target or below those achieved by others in the same or similar jobs.

This can be important in proving in court that the employer’s decision was

based on reasons connected to the suitability or behaviour of the employee.

The appraisal method that is most used is a performance appraisal checklist

on which an evaluator rates performance on a scale such as excellent,

good, average, poor and not acceptable. The continuum often includes a

numerical scale, for example, from one to five.

Performance standards should be realistic, which means that any qualified

and competent person must be able to achieve the desired result.

Further, the standards should be expressed in terms of quantity, quality, time,

cost, effect and methods used. It is important that standards are measurable

because this facilitates comparison with other employees’ performance.

Finally, to avoid legal action by employees, the performance process used

should be objective.



Belgian law on termination of employment does not make any distinction

between good and bad performers.

Strictly speaking, an employer in Belgium may end an employee’s contract

for whatever reason it chooses. Note however, that there are specific rules

protecting certain types of workers. These are employee representatives (or

candidates) on the works council, European Works Council or the health

and safety committee or, in organisations without those bodies, the trade

union.

However, generally, it is not necessary for the employer to demonstrate

that the employee’s performance did not meet the standard. Belgian law

only distinguishes between termination for serious cause and termination

without serious cause. This means that unless the termination is for serious

cause, the employer must respect the normal notice period and pay the

relevant severance indemnity irrespective of the employee’s performance.

Since 1 April 2014, employees do have a right to be informed, if they

specifically request, of the reasons for the termination. If an employer fails

to respond to a timely request by the employee, sent by registered mail, it

owes the employee an indemnity of two weeks’ remuneration.

A dismissal is considered to be ‘manifestly unreasonable’ when an employee

with a permanent contract is dismissed and the dismissal:

is based on reasons which are not connected to the suitability or

behaviour of the employee; or

is not based on the needs of the organisation; and

would never have been approved by a normal and reasonable employer.

The assessment of a manifestly unreasonable dismissal does not cover

the circumstances of the dismissal. As described, it is limited to examining

whether the dismissal was based on the suitability or behaviour of the

employee, or the needs of the organisation.

Moreover, the assessment is merely a test of reasonableness. The employer

retains its right to decide whether a decision is reasonable, and may still

choose between all the options that a normal and reasonable employer

would consider. The labour tribunal does not have the right to test the

merits of the employer’s decisions.

For manifestly unreasonable dismissal, the burden of proof is divided into

the following three possibilities:

Where the employer has given reasons for the dismissal, either on its

own initiative, or following a timely request by the employee: the party

making each statement must prove it (e.g. if the employee says the

employer’s reasons are incorrect, the employee must prove that, but

if the employer responds that the reasons are correct, it must prove

what it says.)

Where the employee has requested reasons, but the employer has

failed to give them in time: the employer must prove the reasons for

the dismissal and show that they were not manifestly unreasonable.

Where the employee has not requested the reasons for the dismissal: the

employee must prove how the dismissal was manifestly unreasonable.

A careful employer should therefore collect as much evidence as possible

about the reasons for dismissals so as to be able to defend a claim for

manifestly unreasonable dismissal (or even avoid one).


General protection

Each party can terminate an employment contract for an indefinite period at

any time by serving notice or making a severance payment in lieu of notice.

In general, it is not necessary for employers to obtain any administrative or

legal approval (unless the employee is a protected employee). Employment

contracts for a fixed term or a specific task automatically terminate at the

end of the agreed period or the end of the task.

Normally, there is no set procedure to be followed when dismissing an

employee. However, there are rules about giving notice and rules surrounding

termination for serious cause. There are also rules about collective dismissals

and plant closure.

Special protection against dismissal

Termination of ‘protected employees’ (i.e. employee representatives (or

candidates) on the works council, European Works Council or the health and

safety committee or, in organisations without those bodies, the trade union)

is only possible if the employer has previously obtained the competent labour

court’s approval to end the contract for serious cause, or after the competent

Joint Labour Committee has recognized economic or technical reasons

justifying the termination.

All other employees enjoying a specific protection against dismissal (e.g. for

pregnancy, maternity leave, paternity leave, time credit and parental leave)

can in principle be dismissed in the same way as unprotected employees.

If the employee requests to know the reason for the dismissal however, the

employer will have to be able to demonstrate that it is not linked to the

special protected status of the employee. If it cannot provide proof of this, the

employee may claim a special indemnity equal to six months’ pay, in addition

to the normal notice period or severance pay in lieu of notice.


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Formalities

In general terms, there are no notification or consultation procedures that

must be followed, unless there is a collective dismissal or plant disclosure or

unless a collective bargaining agreement provides for a specific procedure.

Giving notice means that the employer informs the employee of the

time period before the contract ends (‘period of notice’). The notice of

termination must be in writing, specifying the beginning and duration of

the period of notice.

When the employer gives notice, it can choose between registered mail or a

process server. The employee has the same options, but can also choose to

simply hand over his or her statement to the employer. The employer must

sign the document to acknowledge receipt.

If the employer does not respect the notice period, it must pay an indemnity

in lieu of notice corresponding to the remuneration the employee would

have received during the notice period.

No other formalities need to be fulfilled.



The employee is always entitled to either a notice period or a severance

indemnity in lieu of notice, unless the termination is for serious cause. The

length of the notice period or the period covered by the severance indemnity

is not affected by the employee’s performance.

An employee who has been dismissed in a manifestly unreasonable way,

may claim, on top of the notice period and severance pay, an indemnity of

between three and 17 weeks’ salary. The amount of the indemnity depends

on the degree of the manifest unreasonableness of the dismissal. The law

allows the employee to claim an indemnity based on his or her actual losses,

instead of the flat-rate amount, provided the employee can prove the fault

caused by the employer, his or her own losses and the connection between

them.

The indemnity can be paid in addition to a fine for failing to provide reasons

for the dismissal, severance pay, a non-compete indemnity, an indemnity for

loss of clientele or a supplement to certain social allowances. By contrast, it

cannot be added to any other indemnity owed by the employer following

termination (e.g. an indemnity for protection against dismissal or an

indemnity for discrimination).

Employees cannot claim reinstatement. There is, however, an exception to

this principle for ‘protected employees’ (i.e. employee representatives (or

candidates) on the works council, European Works Council or the health

and safety committee or, in organisations without those bodies, the trade

union).


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There is no definition of a low performing employee in Brazilian labour

law. Based on case law, an employee will be considered a low performer

if he or she does not perform according to (i) the employer’s reasonable

expectations or standards; (ii) the average performance of the employee’s

colleagues or (iii) the specific goals or targets established by the employer.


There is no specific objective measure that must be used to assess low

performance and there are no statutory provisions about this.

In Brazil the parties are not required to have a written employment

agreement. In practice, employers will normally have one but it is usually

simply drafted and does not set out goals, targets or any other type of

objective performance criteria.

The employment agreement usually contains specific provisions indicating

the employee’s position, a summary of the job description and a statement

that the employee will perform the activities to the best of his or her ability

and, to the extent necessary, will do other tasks that the employer may

require, provided they are compatible with employee’s abilities. These

provisions can be used as a reference by the employer to measure the

employee’s performance, although they are not normally detailed enough

to enable a performance review to be based exclusively on them.


We recommend the employer documents evidence of low performance so

that it is able to take action based on what it records. However, the employer’s

scope to act on low performance may be limited, in that low performance is

not considered a valid reason of itself for termination for cause.

By contrast, negligence in performing duties is considered a reason for

termination for cause. The employer has the power to terminate an employee

for cause without having to provide evidence at that point of the facts that

lead to the termination for cause. However, if the employee decides to

challenge the termination, the employer will have the burden of proving that

the decision to terminate was for a reason. Therefore, the employer should

keep a record of the negligent behaviour of the employee. The record could

consist of:

documents showing the employee was aware of the job description

and functions;

training certificates or any type of documents showing that the

employer gave training to the employee on the work to be performed;

documents evidencing instructions from the employee’s supervisor;

the employee’s performance review or results;

documents showing instructions or plans given to the employee

following a poor performance review;

evidence of the employee’s negligence; and

written warnings and/or suspensions in connection with the employee’s

poor performance or negligent acts.

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There are no statutory standards or processes in Brazilian law in relation to

performance management.

Employers usually set up their own performance management systems and

so they use different systems based on their needs. These could involve

different timing (e.g. monthly or yearly); different measurements (e.g.

financial results, behaviour or professional development) and different

objectives (e.g. improvements in quality, numbers and working environment).

Employers often link their performance review system to bonuses or

performance-related pay. To do this, employers must enable to provide clear

the criteria for assessing employees and must inform employees about these

and also about how any bonuses will be calculated.

The performance management system may include consequences for the

employee of being deemed a poor performer, but it should follow the

general labour principle that disciplinary measures imposed on employees

must be proportionate to the fault. The grading of disciplinary measures is

a warning at the lower end, suspension in the middle and termination for

cause for the most severe breaches. Note that termination for cause cannot

be imposed for poor performance. Therefore, the disciplinary measures that

are appropriate for poor performance are warnings. If the poor performance

is repeated after a warning, termination for cause may be carried out based

on negligence.



Employment is ‘at will’ in Brazil and for this reason, an employer does not

have to justify termination without cause. In cases of termination for cause,

the employee will normally be entitled to a severance payment based on the

legislation (unless the conduct is on a statutory list of exceptions).

Poor performance is not a reason for termination for cause, but negligence

in performing the employee’s duties is. If the employee repeatedly performs

poorly, this can be considered as negligence. The employer must inform

employee that the cause for termination is negligence but does not have to

justify it further. Further evidence of negligence will only be required from

the employer if the employee brings a claim challenging the termination

for cause.


Consultation of works council

No consultation of the works council is required in cases of an individual

dismissal based on underperformance (whether the termination is with or

without cause).


If the employee enjoys special protection against dismissal, the labour

union and the works council may refuse to stamp and ratify the termination

papers. Ratification of the termination papers is a requirement for employees

with more than one year of employment to enable them to access their

severance guarantee fund and the unemployment allowance available

upon termination. However, if the poor performance is being treated as

negligence, the termination will be for cause and this will take effect even if

the employee has special protection against termination.

The most relevant ‘protected employees’ are employees returning from sick

leave, pregnant employees, employees who are members of the internal

committee for accident prevention (the so-called CIPA), members of the

severance guarantee fund councils and labour union members.

Formalities

For employees with more than one year of employment, the termination

papers must be stamped and ratified by the labor union or work council.

In cases of termination for cause, the termination notice must indicate the

reason for termination, based on the list of conduct set out in labour law

(e.g. termination for cause based on negligence).



The employee can contest the reasons for dismissal in court.

Because in Brazil employment is ‘at will’, if the employee is terminated

without cause and severance payment is duly made by employer, the

employee will have no claim.

However, if the employee is terminated for cause, he or she can challenge

the termination alleging that poor performance is not an act or conduct that

can justify termination for cause and that the poor performance cannot be

construed as negligence.

Employees can ask the court to change a termination for cause into a

termination without cause and can also ask for a severance payment. In

addition, the employee can claim to have suffered moral damages for being

accused of an act or conduct amounting to negligence, even though the

employer has not been able to prove this in court.


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There is no general definition of low performance in France. Usually, an

employee will be classified as a low performer if he or she does not perform

up to the employer’s standard or the performance is below average for

comparable employees over a representative period. In other words, the

performance does not meet the requirements of the job, as defined by the

employer.

The required quantity and quality of work is usually set out in the job

description, the employment contract or in a collective labour agreement. If

there is no job description available, it will come down to what the parties

have agreed or what reasonably can be expected of an employee in that

position.



performance and there are no statutory thresholds.

All employees must work to the best of their ability and performance is

always based on individual considerations. If a generalised approach is used,

this may be based on performance targets, but the employer might equally

decide to adopt an approach that is more tailored to the circumstances and

abilities of each individual.

Performance should be assessed on a regular basis, for example, by means

of a performance review every six or 12 months. If specific targets are

set at the beginning of the year, a threshold can be used to determine

poor performance based on these. For example, an employee could be

considered to be underperforming if the targets have not been reached or

not substantially reached, or if he or she is significantly below the average

performance of ‘comparable’ employees. The employer must set reasonable

and realistic targets.

It is generally harder to measure the quality of performance or particular

skills such as social skills in an objective way, but the employer can try to set

targets for these too.


It is important to make detailed records of instructions and targets on the

way employees perform and it is also important to assess employees in a

fair and timely way. Low performance should be documented so that any

measures taken as a result (e.g. a warning or termination) can be justified.

Documentation is also essential for successful litigation, as the burden of

proof for low performance is on the employer. It is therefore advisable to

record the following:

A detailed description of both the quantity of the employee’s work

(e.g. the number of calls to customers per hour/day) and the quality

(e.g. the level of detail in reports, the required content and deadlines,

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social skills and/or behaviour towards other employees).

A detailed description of the required performance in terms of both

quantity and quality of work.

Any adverse impacts (e.g. operational consequences) of low

performance.

The performance of comparable employees, including the reasons why

these employees are comparable.

Measures taken to improve performance. For this, a ‘Performance

Improvement Plan’ (PIP) is highly recommended and it should include

a detailed definition of tasks and expectations; detailed instructions;

records of daily activities and working outcomes; guidance and training

offered; assessments of improvement; frequency of evaluations; the

timeframe within which targets and goals should be reached; and

confirmation of the consequences of failure to reach the targets.

The PIP should be implemented for a reasonable period, depending on the

length of service of the employee and the nature of the low performance.

Generally, a PIP lasts between three months and a year. The PIP should be

formalised and communicated to the employee and it should be explained

to the employee that the PIP is a set of instructions. Further, it should be

made very clear to the employee what the consequences of failure of the PIP

will be, so as to enable the employer to take appropriate measures.



There are no statutory standards or processes in French law in relation to


However, in practice organisations tend to organise regular appraisal

interviews based on targets. The parties are free to agree any targets

they think suitable and what weight they should be given. Targets may

include short- and long-term goals, including ‘hard targets’ such as

project implementation and ‘soft targets’ such as customer satisfaction

or behavioural targets. The goals must be sufficiently detailed to enable

objective and fair evaluation of whether they have been reached at the end

of the period. The targets can also be reviewed and adjusted if necessary

along the way.

Some organisations have laid down guidelines and scores for performance,

for example, if the employee scores ‘insufficient’ more than twice in their

annual assessment, the employment will be terminated. Although individual

circumstances will always have to be taken into account, case law shows

that these kinds of rules usually stand up in court.



Dismissal is justified if it is clear that the employee is not performing to an

acceptable standard or to the standard agreed in the employment contract

and the employee has had the time, opportunity and tools to improve, but

has failed to do so.

The employer should check whether there is a lower position available

within the organisation that does not require the skills the employee is said

to lack and if there is such a role, the employer should offer it.

Dismissal should be considered as a last resort, where continuation of the

employment relationship would be unreasonable, taking into account the

mutual interests of the parties.

For dismissal based on underperformance, the court assesses whether the

following conditions have been met:

the employee has been made aware of the underperformance and

preferably been given one or more warnings;

the employer has offered sufficient guidance and training to support

the employee in their efforts to improve performance and to reach the

targets;

no other suitable position is available for the employee within the

organisation.

If the underperformance persists even though the employee has had a

realistic chance to improve performance following guidance and training,

termination of the employment may be considered on grounds of ‘change

in circumstances’.

Note that it is often difficult to identify a specific reason for low

performance. However, the employer should make efforts to do so as part

of its performance management. It should be clear to the employee why

the performance is considered insufficient and what aspects need to be

improved in order to comply with the job requirements.



No consultation of the works council is required in cases of individual

dismissal based on underperformance, except if the employee is protected

(e.g. as a staff or union representative).


If the employee enjoys special protection against dismissal, prior approval

of the labour inspector must be obtained. The most relevant ‘protected

employees’ are members of the works council, staff representatives and

union representatives. Pregnant employees and victims of workplace

accidents are fully protected against dismissal unless they have committed

gross misconduct.

Formalities

For the unilateral dismissal of a protected employee, prior approval must be

obtained from the labour inspector. This is the only case where a particular

formality is required.



The employee can contest the reasons for dismissal in the Court.

If an employee was protected (e.g. as a staff or union representative) and the

employer obtained prior approval to dismiss the employee from the labour

inspector, the employee can challenge the labour inspector’s authorization

with the immediate supervisor of the inspector. If the decision remains the

same, the employee can contest it in an administrative court.

The court is authorised to award a severance payment to the employee. In

order to calculate the amount of severance, the court generally applies the

following principles:


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for employees with less than two years’ service, it depends on the

actual damage;

for from two to six years’ service, six months’ salary;

for over six years’ service, one month’s salary per year of service.

For protected employees, where the court orders the dismissal authorisation

to be cancelled:

if the employee does not ask to be reinstated, in addition to the above

damages, he or she will obtain payment of salary from the time of the

dismissal to two months after notification of the court order cancelling

the administrative authorisation for the dismissal;

if the employee asks for reinstatement, he or she will only receive

compensation for material and moral harm suffered between the

dismissal and the reinstatement.


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There is no general definition of low performance. Broadly, an employee will

be classified as a low performer if the employee does not perform to the

best of his or her ability and his or her performance is significantly below the

average performance of comparable employees over a sufficiently long and

representative period. Thus, although the employee performs work as he or

she is obliged to do, the performance does not meet the average in terms of

type of performance or quality.

Low performance can manifest itself as follows:

the task has been done on time but the quality of the work is

inadequate;


The required quantity and quality of work is determined by the contract or – if

there are no contractual arrangements about these issues – by the employer’s

right to give instructions and by the capabilities of the individual. It is essential

to note that an employee – unlike, for example, an entrepreneur – is not

required to be successful or to perform to an objectively determined standard,

but simply to perform. Therefore, the employee must perform his or her

duties with care, using the skills at his disposal, but that is the limit of what

the employee is required to do.


There is no objective measure that must be used to assess low performance

and no statutory thresholds.

All employees must work to the best of their abilities and performance is

always based on individual considerations. A generalised approach that

takes no account of the individual is not suitable for evaluating performance.

However, a threshold can be used as a starting point for determining poor

performance based on low quantity. Thus, an employee could be considered

to be performing to a low level if his or her performance is at least one third

below the average performance of ‘comparable’ employees over a period of

several months. ‘Comparable’ employees are the benchmark. Whether they

are suitable comparators depends how similar the tasks are and whether the

employees have a similar level of work experience and are of similar age.

In terms of poor performance based on quality, there is no threshold in

case law, for the same reason - absolute standards do not take sufficient

account of the type of activity and the types of possible errors. The weight

that should be given to a single, isolated error, for example, may vary widely.


Detailed recordkeeping about the employer’s instructions, targets and

their performance are very important, as are fair and timely evaluation.

Low performance must be documented so that any measures taken in

consequence of the poor performance (e.g. termination or a warning) can

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be justified. Documentation is also essential for successful litigation, as the

burden of proof is on the employer to prove the low performance in court.

Therefore, it is advisable to record the following:



(e.g. the level of detail in reports, the required content and deadlines)

for a period of at least three months.



Any adverse impacts (e.g. operational consequences) of the low

performance.

The performance of comparable employees (including the reasons why

these employees are comparable).


Improvement Plan’ (‘PIP’) is highly recommended including a

description of the underperformance; a detailed definition of tasks

and expectations; detailed instructions; records of daily activities

and working outcomes; assessments of improvement; and further

instructions.

The PIP should be implemented for a period of three to six months (including

writing up the records). The specific requirements will depend on the

duration of the employment relationship. The PIP should be formalised and

communicated to the employee and it should be explained to the employee

that the PIP is a set of instructions.



There are no statutory standards or processes in German law in relation to



interviews based on targets. The parties are free to agree any targets they

think suitable and what weight they should be given at their discretion.

Targets may include short- and long-term goals, including ‘hard targets’ such

as project implementation and ‘soft targets’ such as customer satisfaction.

The goals must be sufficiently detailed to enable objective and fair evaluation

of whether they have been reached at the end of the period. The targets

can also be reviewed and adjusted as necessary. The manager can overrule

the employee’s initial goals as long as the targets he or she sets are realistic

and achievable. Managers should be aware that job satisfaction and the

future prospects for the employee are an important part of performance

management.



Dismissal is justified if the employee has breached his or her contractual

obligations and there are no less draconian measures to enable the

employment relationship to continue. Thus, dismissal should only be

considered as a last resort, where the continuation of the employment

relationship would be unreasonable, taking into account the mutual

interests of the parties.

The specific requirements of the dismissal depend on whether the

underperformance is something that can be managed by the employer or

not, as explained below:

a.Manageable low performance

If, for example, the problem is that targets have not been achieved because

of persistent delays, the employer must give a warning to the employee.

Depending on the type of contractual obligations that have been breached

as a result of the underperformance, it may be necessary to then give a

second ‘stronger’ warning.


realistic chance to improve his or her performance following the warning

and a balance of interests test weighs in favour of the employer, termination

may be considered on grounds of ‘behaviour’.

b.Unmanageable low performance

If the underperformance is not due to factors in the control of the employee,

the employer may consider dismissing the employee for reasons to do with

the individual. A warning is not an appropriate step in this case because the

employee is working to the best of his or her ability.

The essential requirements for a valid dismissal for individual reasons to do

with the employee are as follows:

The employee’s performance has been objectively assessed as

low (e.g. quantitative performance is at least one third below the

average performance or the individual’s error rate is above the rate of

comparable colleagues over a period of several months).

Continuation of the employment is unreasonable, not only in

comparison to others but in terms of an individual consideration of

performance.

The performance forecast is negative and unlikely to improve.

The employer has taken all reasonable steps to try to improve the

performance, including putting place a Performance Improvement Plan

(‘PIP’) over a period of three to six months.

There is no other position that would be suitable for the employee

within the organisation.

A thorough and comprehensive consideration of the mutual interests

of the employer and employee weighs in favour of the employer. In

a balance of interests test of this kind, it is necessary to consider, on

behalf of the employee their age, seniority, obligations to support

dependants, disabilities, the extent of the shortfall in performance and

the course of the employment before the issue of performance arose.

In terms of the employer, the balance test should weigh the operational

interests of the employer (i.e. the impact of the poor performance

on operations) and the financial burden of the performance (i.e. the

fact that the employer is required to pay the full salary but receives

inadequate performance in return).

Note that it is often difficult to identify a specific reason for low

performance. However, the employer should make efforts to do so as part of

its performance management. If the employer is uncertain about the cause,

it is advisable to combine formal warnings with a PIP.



Prior to any dismissal, the employer must consult the works council (if one

exists). The consultation must include all information and documents that

the employer has relied on in coming to its decision to dismiss. Written

notification is recommended for evidentiary purposes. The works council

has seven days to respond to the planned termination but cannot prevent it.


14

The dismissal will only be valid if this period has expired or the works council

has stated that it has no comments.


If the employee enjoys special protection against dismissal further steps

must be taken before dismissing the employee. For example, if dismissing

a disabled employee, an employee on maternity leave or parental leave,

approval must first be obtained from the relevant authorities. Termination of

a member of the works council is only valid for serious cause and must be

endorsed by the works council or, if no endorsement is given, by the local

labour court.

Formalities

Any dismissal must be signed by an authorised signatory of the organisation.

Effectively, this will be the official head of human resources (‘Personalleiter’),

the managing director or an authorised representative. Whether the

managing director or the authorised representative have the authority to

sign alone depends on the entries made in the German Commercial Register.

Proof of delivery of the termination letter should be obtained.



No indemnity claims can be made based solely on the invalidity of a

termination. It takes further circumstances, such as a dismissal based on

discrimination for disability, age, race, ethnic origin, gender, religion, secular

belief or sexual identity to entitle the employee to claim an indemnity.

The employee can claim reinstatement. If the employee wants to be

reinstated, he or she must file a claim for unfair dismissal within three weeks

of receiving notice. The court may decide that the dismissal was invalid and

therefore the employment relationship should continue.

If the employee does not file a claim in time the dismissal will be deemed

valid.


15



There is no general definition of low performance. Broadly, an employee

will be classified as a low performer if the employee’s performance is

significantly below the average performance of comparable employees over

a sufficiently long and representative period.

According to case law, the dismissal of a low performing employee is valid if:

there is a discrepancy between the employee’s performance and

the performance of the average employee employed in the same

organisation, carrying out the same duties in the same area and under

the same conditions;

failure to achieve the performance targets carries on for a significant

period;

the employee’s low performance is not due to other factors, such as

social or environmental ones, or to the organisation itself;

there is proof that the low performance was due to negligence on the

part of the employee.


There is no objective measure that can be used to assess low performance and

no statutory thresholds.

It is essential to note that an employee – unlike, for example, an entrepreneur

– is not required to be successful or to perform to an objectively determined

standard, but simply to perform. Therefore, the employee must perform his or

her duties with care, using the skills at his or her disposal, but that is the limit

of what the employee is required to do.

All employees must work to the best of their abilities and performance is

always based on individual considerations. A generalised approach that takes

no account of the individual is not suitable for evaluating performance.

In terms of poor performance based on quality, there is no threshold in case

law, for the same reason - absolute standards do not take sufficient account

of the types of activity or the ways in which the employee could fail to meet

the standard.


It is important to make detailed records of instructions and targets and the







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for an adequate period.






performance.



There are no statutory standards or processes in Italian law in relation to


Targets can be set, but they must be reasonable. These can be a useful

benchmark if disciplinary action is needed later on, or if the employer

wishes to dismiss the employee.



The essential requirements for a valid dismissal for subjective reasons based

on poor performance are as follows:

the employee’s performance has been objectively assessed as low;

the performance forecast is negative and unlikely to improve and

the employer has taken all reasonable steps to try to improve the

performance.

‘Poor’ performance cannot be considered in itself as a fair reason to dismiss

an employee. The dismissal reasons must refer to specific and serious breaches

of the employee’s legal and contractual obligations. Dismissal will be justified

if the employee has breached his or her contractual obligations. Thus,

dismissal should only be considered as a last resort, where continuation of the

employment relationship is not an option.

In practice, dismissal for poor performance is one of the most difficult to carry

out in Italy, as it is very hard to provide objective evidence of poor performance

and judges are reticent about accepting this as a ground for dismissal.



Consultation with the work council is not required for dismissals carried out

for subjective reasons.


A female employee cannot be dismissed during her pregnancy and until her

child’s first birthday (unless for just cause unrelated to performance).

Dismissal is also forbidden during the first year after marriage (both for

female and male employees).

Further, a disabled employee cannot be dismissed for low performance if

this relates to the employee’s disability.

Formalities

The law provides two different kinds of dismissal in the case of an indefinite

term contract: dismissal for just cause and dismissal with notice. In both

cases the dismissal must be served in writing. Proof of delivery of the

termination letter should be obtained.

An employee dismissed for poor performance has the right to a notice

period. If the employer gives the employee no notice, it must pay the

dismissed employee an indemnity equivalent to the pay the employee would

have received during the notice period.

A specific disciplinary procedure must be followed:

the employer must send a warning letter to the employee describing

the facts, as soon as they are known (according to case law, the letter

must be sent ‘immediately’);

wait for five days to give the employee the opportunity to reply;

send a dismissal letter to the employee.

Note that depending on the seriousness of the breach, a series of disciplinary

sanctions may be considered appropriate before proceeding to dismissal.

Note also that collective bargaining agreements often provide additional

rules about the disciplinary procedure (e.g. a longer time limit for the

employee’s reply or a maximum time limit within which the employer must

carry out the dismissal).

Failure to comply with this procedure will automatically result in dismissal

being unfair.



If a dismissed employee made a claim against the employer, the outcomes

could be as follows:

No reinstatement, but compensation of between six and 12 months’

salary. This could apply to failure to follow the proper procedure for

dismissal for a subjective justified reason, in cases where there were full

and adequate reasons for the dismissal.

No reinstatement, but compensation of between 12 and 24 months’

salary. A judge would apply this sanction if the dismissal was unlawful,

but the facts on which it was based were true (e.g. where there is

evidence of the employee’s misbehaviour but it is not a serious enough

reason for dismissal).

Reinstatement and compensation of up to 12 months’ salary. A judge

could apply this sanction if the facts were not shown to be true.

Reinstatement with ‘full’ compensation (i.e. for all lost pay from the

date of termination up to the effective date of reinstatement). A judge

could apply this sanction if he or she finds that the dismissal was

discriminatory (e.g. based disability, age, race, ethnic origin, gender,

religion, secular belief or sexual identity).


17



Mexican federal labour law does not provide a general definition of low

performance. Broadly, an employee will be classified as a low performer if

he or she does not perform diligently and efficiently and the performance is

significantly below the average performance of comparable employees over

a sufficiently long and representative period. Thus, although the employee

performs work according to the contract, the performance does not meet the

average in terms of type of performance or quality.

Low performance can manifest itself in different ways, as follows:

the task has been done on time but the quality of the work is inadequate;


The required quantity and quality of work is determined by the contract or – if

there are no contractual arrangements about these issues – by the employer’s

right to give instructions and by the capabilities of the individual. It is essential

to note that an employee – unlike, for example, an entrepreneur – is not

required to be successful or to perform to an objectively determined standard,

but simply to perform. Therefore, the employee must perform his or her

duties with care, using the skills at his disposal, but that is the limit of what

the employee is required to do.


There is no objective measure that must be used to assess low performance

and no statutory thresholds.

All employees must work to the best of their abilities.






It is important to mention that low performance is not a cause for termination

under Mexican law. However, a significant and recurrent decrease in the

volume of operations is considered a special cause for termination in relation

to sales positions.







for a period of at least three months.




performance.

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Improvement Plan’ (‘PIP’) is recommended including: a description of

the underperformance; a detailed definition of tasks and expectations;

detailed instructions; records of daily activities and working outcomes;

assessments of improvement; and further instructions.

The PIP should be implemented for a sufficiently long and representative

period. Specific requirements may depend on the duration of the

employment relationship.

The PIP should be formalised and communicated to the employee and it

should be explained to the employee that the PIP is a set of instructions.



There are no statutory standards or processes in Mexican law in relation

to performance management. Therefore, employers often implement

performance management guidelines at their own discretion and in most

cases follow corporate policies. It can be important for employers to gather

hard evidence of poor performance when appraising employees so as to be

able to justify a dismissal and defend their position in litigation.



Low performance is not a cause for termination under Mexican law and so

termination for low performance cannot be justified unless there is hard

evidence of the low performance linked to specific and contractually agreed

targets and expectations.

However, note that a significant and recurrent decrease in the volume of

operations is considered a special cause for termination in relation to sales

positions only.

General requirement for termination

There are no general requirements for termination for low performance in

Mexico, as this is not a cause for termination. However, as the burden of

proof in relation to the grounds for dismissal is entirely on the employer, it is

wise for employers to gather hard evidence before terminating an employee

based on low performance.

However, in more general terms, the employer is obliged by Mexican law

to serve written notice about termination to the employee, specifying the

conduct that motivated it, as well as the dates on which the conduct took

place. Notice must be signed by the organisation’s legal representative.

Notice should either be delivered personally to the employee at the moment

of the dismissal or be communicated to the competent Labour Board within

the following five business days, in which case the employer must provide

the employee’s last domicile registered in its files, so that the Labour Board

can deliver it to the employee in person.

If the employer fails to deliver the notice to the employee either personally

or via the Labour Board, the termination will be deemed unjustified.

By law, employees who are dismissed have two months from receipt of

written notice in which to make a claim, but after this, the employee will

have no right to claim against the employer.

It is always wise to analyse the causes and evidence motivating termination,

as well as looking at ways to avoid litigation by means of a termination

agreement.



The employee may claim an indemnity. The employee may request before the

Labour Board either an indemnity (i.e. severance payment) or reinstatement

in his or her position. In such a case, the employer would have the burden

of showing evidence that there was a justified cause for dismissal or that

a voluntary termination agreement has been was signed. If an agreement

has been ratified before the Labour Board, this will be strong evidence to

support the employer.

We recommend employers should gather hard evidence of the cause for

termination because if a matter goes before the court, the burden of proof

will rest with the employer. If there is insufficient evidence, it is advisable not

to dismiss, but instead to try to reach a settlement.

A full indemnity would comprise three months of ‘integrated salary’ (i.e.

base salary plus benefits) and 20 days of integrated salary per year of service.

The employee would also be entitled to payment of any accrued benefits

in arrears as at the date of termination; a seniority premium of 12 days of

salary per year of service (capped at double the minimum wage); and back

pay.

An employee may request either an indemnity or reinstatement before the

Labour Board, at his or her discretion.

However, the employer may be released from having to reinstate the

employee by paying an indemnity.

By law, employees who are dismissed have two months from receipt of

written notice in which to make a claim, but after this, the employee will

have no right to claim against the employer.


19



There is no general definition of low performance in the Netherlands.

Generally, an employee will be classified as a low performer if the employee

does not perform to the employer’s standard and/or the performance

is below the average performance for comparable employees over a

representative period. In other words, the performance does not meet the

requirements of the job, as defined by the employer.

The required quantity and quality of work is usually set out in the job

description. If there is no job description, it will come down to what the

parties have (contractually) agreed and/or what can reasonably be expected

of an employee in that position.



performance and there are no statutory thresholds.

All employees must work to the best of their ability and performance is

always based on individual considerations. If a generalised approach is used,

this may be based on performance targets, but the employer might equally

decide to adopt an approach that is more tailored to the circumstances and

abilities of each individual.

Performance should be assessed on a regular basis, for example by means

of a performance review every six or 12 months. If specific targets are set

at the beginning of the year, a threshold can be used to determine poor

performance based on these. For example, an employee could be considered

to be underperforming if the targets have not been reached, or if he or she

is significantly below the average performance of ‘comparable’ employees.

The employer must set reasonable and realistic targets.

It is generally harder to measure the quality of performance or particular

skills such as social skills in an objective way, but the employer can try to set

targets for these too.







proof for low performance is on the employer.

Note that as from July 2015, if a dismissal request is filed in court, the

employer will need to prove in court that the employees’ performance is

(too) low; that the employee has been made aware of this and has been

given the opportunity to improve his or her performance; and that the low

performance is not the result of insufficient attention by the employer to the

employee’s training or other job-related circumstances.

It is therefore advisable to record the following:

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(e.g. the level of detail in reports, the required content and deadlines,

social skills and/or behaviour towards other employees).



Any adverse impacts (e.g. operational consequences) of low

performance.


Improvement Plan’ (PIP) is highly recommended and it should include:

a detailed definition of tasks and expectations; detailed instructions;

guidance and training; assessments of improvement; details of the

frequency of evaluations; the timeframe within which targets and

goals should be reached; and confirmation of the consequences of

failure to reach the targets.

The PIP should be implemented for a reasonable period, depending on the

length of service of the employee and the nature of the low performance.

Generally, a PIP lasts between three months and a year. The PIP should be

formalised and communicated to the employee and it should be explained

to the employee that the PIP is a set of instructions. Further, it should be

made very clear to the employee what the consequences of failure of the PIP

will be, so as to enable the employee to take appropriate measures.



There are no statutory standards or processes in Dutch law in relation to



interviews based on targets. The parties are free to agree any targets

they think suitable and what weight they should be given. Targets may

include short- and long-term goals, including ‘hard targets’ such as

project implementation and ‘soft targets’ such as customer satisfaction

or behavioural targets. The goals must be sufficiently detailed to enable

objective and fair evaluation of whether they have been reached at the end

of the period. The targets can also be reviewed and adjusted if necessary

along the way.

Some organisations have laid down guidelines and scores for performance,

for example, if the employee scores ‘insufficient’ more than twice in a row

in their annual assessment, the employment will be terminated. Although

individual circumstances will always have to be taken into account, case law

shows that these kinds of rules usually stand up in court.



Dismissal is justified if it is clear that the employee is not performing to an

acceptable standard or to the standard agreed in the employment contract

and the employee has had the time, opportunity and tools to improve,

but has failed to do so. Further, the employer must check whether there

is a suitable alternative role available within the organisation that does not

require the skills the employee is said to lack. If there is such a role, the

employer should offer it to the employee.

Dismissal should be considered as a last resort, where continuation of the

employment relationship would be unreasonable, taking into account the

mutual interests of the parties.

For dismissal based on underperformance, the court assesses whether the

following conditions have been met:

the employee has been made aware of the underperformance and

preferably been given one or more warnings;

the employer has offered sufficient guidance and training to support

the employee in their efforts to improve performance and to reach the

targets;

no other suitable position is available for the employee within the

organisation, even after training the employee for a reasonable time.


realistic chance to improve performance following guidance and training,

termination of the employment may be considered on grounds of ‘change

in circumstances’. (Note that as from July 2015, one of the possible grounds

for termination will be the low performance of the employee (the so-called

‘D-ground’)).

It is often difficult to identify a specific reason for low performance. However,

the employer should make efforts to do so as part of its performance

management. It should be clear to the employee why the performance is

considered insufficient and what aspects need to be improved in order to

comply with the job requirements. If the above conditions are not fully met,

the court will deny the request for termination of employment.



No consultation of the works council is required in cases of individual

dismissal based on underperformance.


Some employees enjoy special protection against dismissal, e.g. members

of the works council, staff representatives, union representatives, pregnant

employees and ill employees. If the employee enjoys special protection

against dismissal, a dismissal based on low performance is still possible.

However, the employer should be able to prove in court that the reason for

dismissal is not linked in any way to the circumstances based on which the

employee enjoys the special protection.

There is also a prohibition against discriminating on the basis of disability.

Extra caution is therefore needed if the underperformance could be related

to this. Only if the disability clearly makes the employee unfit for the job,

is dismissal an option. The employer has a far reaching obligation to make

adjustments to the working conditions and workplace to enable such

employees to do their jobs.

Formalities

For any unilateral dismissal by the employer, prior approval must be obtained

from the court. In most cases, the parties first try to reach an agreement on

the conditions for termination by mutual consent. If parties are not able to

reach an agreement, the employer should file a petition in court.



If the employee disagrees with the assessment of his or her performance


21

and this leads to a court procedure, the employee can contest the reasons

for dismissal in this procedure. If the court agrees with the employee, it will

deny the request to terminate the agreement of the employee.

As from 1 July 2015, a transition payment will be due in cases where the

employee has served more than two years. The transition payment will be

as follows:

for the first ten years’ service: one third of the gross monthly salary

per year;

for every year thereafter: half of the gross monthly salary per year, to

a maximum of EUR 75,000 (or one year’s salary, if this is higher than

EUR 75,000).

in exceptional circumstances, resulting in serious culpable acts or

omissions of the employer, the court is authorised to award additional

‘reasonable’ compensation to the employee.


22



There is no general definition of low performance. Generally, the employer has

the right to choose employees who can ensure the best possible performance

of its activities. Therefore, an employee may be dismissed by reason of his or her

performance if the employer has reasonable grounds to believe that employing

a different person will bring better results.

In practice, to justify a dismissal based on underperformance, the employer will

need to demonstrate that the employee has failed to perform tasks properly (e.g.

the quality of work was inadequate, was insufficient or the work was delayed)

or that the employee has a general level of performance which is lower than the

level expected by the employer (although the standard expected by the employer

is realistic in the circumstances) or lower than that of other employees.

Low performance justifying dismissal need not be caused by an employee’s

negligence - it may also be caused by objective reasons (e.g. the employee’s lack

of ability) without any fault on the part of the employee. The employer does not

need to be able to show that the low performance has caused any operational

difficulties.


The law does not provide any concrete means of comparing employees’

performance. There are also no thresholds that can be used to determine

at what point an employee can be considered to be a low performer in

comparison with other employees.

Nevertheless, the employer’s assessment of employees’ performance must

be based on ‘objective’ and ‘fair’ criteria. These should only relate to the

employee’s work and performance. They should not relate to personal

characteristics of the employee, such as age or sex.


For a performance-related dismissal to stand up in court, the employer

must be able to show extensive evidence of low performance. This could

be done using documents that show the quality of work was inadequate

or insufficient or the work was delayed. Documentation, however, is not

a requirement. Witness testimonies are good evidence and are sometimes

even more highly valued by the courts.

Employees should be allowed to comment on assessments made by their

employer. If an employee accepts a poor assessment and is later dismissed

following lack of improvement, the assessment can be used as evidence of

the employee’s unsatisfactory performance.



There are no statutory standards or processes in Polish law in relation to

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performance management. In particular, there is no requirement for the

employer to take steps to improve the performance of existing employees,

for example by introducing a Performance Improvement Plan (PIP) for

underperforming employees before dismissal.

In practice, employers usually hold regular appraisals based on targets, as this

allows them to track employees’ performance and also provides evidence in

any subsequent litigation. The targets should be realistic and specific so as

to enable the employee to understand them and the manager to assess

whether they have been achieved at the end of the assessment period.

Note that if employers are considering PIPs, it is advisable to consult a

lawyer, because depending on their structure, they may be either a help or

a hindrance.



In general, dismissal will be justified if the reasons given in relation to the

employee’s performance are true and specific.

Dismissal for low performance does not have to be treated as a last resort.

Under Polish law, it does not have to be preceded by a Performance

Improvement Plan (PIP) or any analysis of the performance forecast or even

by giving warnings. The employer also does not have to consider moving

the individual to another position within organisation. These measures, if

properly taken, may help the employer in a later court dispute but are not

a legal requirement.

Dismissal could be justified, for example, if the employee has failed to

perform an assigned task properly; made errors on several occasions; failed

to reach a target; or has achieved poorer results than other employees.

The chances that a dismissal will be justified will increase if more than one

low performance reason is given. Every additional low performance reason

will make the case for dismissal stronger.

In some exceptional and rare cases, underperformance may also justify

immediate dismissal for cause. This is unusual because summary dismissal

requires a gross breach of employee’s basic duties which is either intentional

or grossly negligent. (By contrast, dismissal by notice does not require any

fault on the part of the employee.)


Consultation of trade union

Prior to the dismissal of an employee on an indefinite term contract, the

employer must consult with the trade union the employee belongs to (if one

exists at the organisation). To do this, the employer should notify the union

in writing about the planned dismissal and the reasons for it. The union

then has five days from receiving the notification (or three in the case of

immediate dismissal) to provide the employer with its opinion. The union’s

opinion is not binding. The employer may proceed with the dismissal after

receiving the union’s comments or once the time for receiving them has

lapsed.

Dismissal of fixed term employees by notice does not require trade union

consultation. However, summary dismissal of these employees does require

consultation.


Certain categories of employees are protected against dismissal, for example,

employees during sick leave or vacation leave, pregnant employees,

employees on parental leave, employees within four years of reaching

retirement and trade union leaders. These categories of employees either

cannot be dismissed by reason of low performance, or can only be dismissed

with the trade union’s consent (which is almost always refused). However,

certain categories of protected employees may be summarily dismissed.

Formalities

The employer must serve the employee with written notice of termination

of employment, signed by an authorised signatory of the organisation

(i.e. a member of the entity’s management board or a person with power

of attorney). The letter must state the reasons for the dismissal (with the

exception of termination of fixed term employment by notice). The reason

must be detailed and specific and must be described clearly and in a way that

is comprehensible to the employee. The letter must also contain information

about the employee’s right to appeal against the dismissal to a labour court.

Dismissal upon notice is effective after expiry of the notice period, which

varies from two weeks (effective on the Saturday) to three months (effective

at the end of calendar month), depending on type of employment agreement

and the employee’s length of service. If the employee is on probation,

the notice varies from three days to two weeks, based on length of the

agreement. Immediate dismissal is effective as soon as the termination letter

has been served on the employee.



An employee who appeals against dismissal to the court, has the right to

make one of two alternative claims:

a claim for an indemnity in the amount of their remuneration for the

period of the notice (this amount is in addition to the remuneration

actually received by the employee during the notice period);

a claim for reinstatement in the job, plus remuneration for the period

of unemployment (this is normally limited to one or two months’

pay, but in the case of certain protected categories of employees, the

amount is unlimited).

If the court finds that the dismissal was unjustified or formally invalid

(e.g. termination was not notified in writing to the employee), the court

will award either an indemnity or reinstatement, according to employee’s

wishes. If it finds that reinstatement is impossible or unjustified (e.g. the

termination was procedurally invalid, but the charges against the employee

were justified), it may refuse to grant reinstatement and may award an

indemnity instead.

An employee who has been served notice of termination has seven days

(or 14 days in the case of summary dismissal) to appeal to the court. The

notice will be treated as valid and the employment will terminate pending

the appeal.


24



There is no statutory definition of low performance, but in practice, it usually

means there are issues with the quality of work performed by an employee.

A low performer can be defined as an employee who is not doing a job

properly in accordance with set standards. Therefore, low performance covers

issues of quality and the ability of an employee to perform at the required level.

As there are no mandatory performance standards, employers are free to set

their own. Employers usually determine standards in the contract in the form of

a job description outlining the employer’s expectations and employee’s duties.

The following may serve as indicators of low performance:

regular unacceptable quality of work compared to the set standards;

failure to follow employer’s operating procedures;

failure to keep costs within the arranged budget;

failure to meet specified deadlines or targets;

low financial returns on projects conducted by the employee.

However, employers wishing to tackle low performance should be aware of

the following legal implications:

employees need to be made fully aware of the required standards at the

beginning of the employment (e.g. they must have been familiarised

with the job description) and they must be shown the results of their

appraisals and asked to sign them);

employees should be provided with the facilities they need to work in

accordance with the employer’s standards.

These factors are particularly important if the employer wishes to

discipline or dismiss a low performer.


There are no mandatory performance standards set out in law, and so

employers are free to set their own. Employers usually determine standards

in the contract in the form of a job description outlining the employer’s

expectations.


Detailed recordkeeping of employees’ work is crucial, since any measures

(i.e. dismissal or other disciplinary action) taken as a consequence of low

performance need to be justified and formally documented. The burden of

proving the legal grounds for dismissal or other disciplinary action brought

against an employee is on the employer. Thus, if the employer fails to

document the process, the employee may well be successful in challenging

the disciplinary action or dismissal.

We recommend the employer should record all information related to

employee’s performance and in particular it should:

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Provide a written job description, which the employee should be

familiarised with and asked to sign. It should be reasonably detailed,

as, by law, the employer may only require the employee to perform the

duties specified in the job description.

Provide written details of tasks and instructions given to employees.

Ensure that if the employee’s immediate supervisor or peers become

aware of low performance, they inform the general manager (or other

authorised officer) of the facts in writing.

Collect feedback from clients of the employer who have worked with

the employee.

Ensure the employee is aware of the assessment of the work and of any

measures that can be offered to him or her to improve performance.



There are no statutory standards or processes in Russian law in relation to


However, in practice many organisations have an appraisal procedure.

This is a system of measures aimed at assessing employees’ performance

against the standards or targets the employer uses for its activities. These

could include financial performance and efficiency, for example. There is no

obligation on employers to conduct appraisals, but if they wish to be able

to dismiss an employee on grounds of unsuitability for the position, they

will need to have an official appraisal system, as the results of this should

confirm the unsuitability.

The appraisal system should also serve to inform the employee about any

dissatisfaction the employer has with the employee’s performance, and

make clear what the expectations are.



Dismissal is justified under the following circumstances:

the dismissal falls within one of statutory grounds for dismissal;

dismissal is an appropriate and reasonable measure having regard to

the gravity of employee’s misconduct;

the statutory procedures for dismissal or other disciplinary sanctions

have been followed.

Under Russian law an employee cannot be dismissed for poor performance

alone. Instead, the law provides specific grounds for termination of

employees and these may be used to dismiss an employee because of

poor performance. Specifically, the employer has the right to dismiss an

employee whom it considers unsuitable for the position because he or she

has insufficient skills or for disciplinary reasons. These are discussed in turn

below.

Dismissal of the employee due to unsuitability for the position

The fact that the employee has insufficient skills and is therefore unsuitable

should be confirmed by a formal appraisal (or ‘attestation’ in terms of

Russian employment law). The appraisal procedure used by the employer

should be available as a company policy and all employees should be made

aware of it. The policy should be implemented in accordance with any

statutory requirements that might apply (although there will normally be no

such requirements in the private sector). It is likely that the only obligation

on the employer will be to allow the employee representatives to participate

in the decision-making of the appraisal committee.

We recommend that the appraisal policy should include the following:

the purposes of the appraisal procedure;

the categories of employees subject to it;

the members of the appraisal committee;

the individuals responsible for arranging appraisals;

the frequency of appraisals;

the documents to be produced as part of the appraisal (e.g. feedback

forms, instructions based on the outcome of the appraisal and a

timetable for appraisals);

the standards against which employees’ performance should be

monitored.

The results of the appraisal procedure should be formalised. If the employer

decides to dismiss the employee as a result of an appraisal, it should first

offer any vacant positions at the employee’s level of qualification or lower

within the organisation. If there are no vacant positions or employee turns

them down, the employer can proceed to dismiss the employee.

Dismissal of the employee for disciplinary reasons

The employer may also terminate the employee for disciplinary reasons.

In particular, the employer has the right to dismiss the employee for

repeated non-fulfillment of job duties. In order to terminate the employee’s

employment on this ground the employer must already have imposed at

least two disciplinary sanctions against the employee. To impose disciplinary

sanctions, the employer must:

Define what actions constitute a breach of the employment

agreement, job description, or internal policies of the employer. The

employer should also document the breach (e.g. in a written note by

the employee’s line manager).

Ask the employee to give a written explanation of the facts within two

working days.

If the employee refuses to provide written explanations, the employer

should draw up a written statement to the effect that the employee

has refused to provide an explanation and this should be signed by at

least two witnesses. Note that the fact that the employee does not

provide an explanation does not prevent the employer from imposing

a disciplinary sanction against the employee.

Impose a disciplinary sanction within one month of the date the

misconduct was discovered, or the date it should have become known

to the employer.

Only impose disciplinary sanctions up to six months after the date of

the misconduct, unless the sanctions are based on the results of an

inspection or audit, in which case they may be imposed up to two

years after the date of the misconduct.

Inform the employee that, within three working days of the sanction

being imposed, he or she must sign to acknowledge an order setting

out the sanction in writing. If the employee refuses to sign, the

employer will draw up a statement setting out that fact.

Employees may also be dismissed for gross misconduct. A list of violations

that can be considered as gross misconduct is set out in law and includes

the following:


26

unjustified absence from the workplace for one day, or for more than

four consecutive hours during one working day;

appearance at the workplace in a state of alcoholic, narcotic and/or

other form of intoxication;

the disclosure by an employee of a secret protected by law (i.e. a state

secret or trade secret) that became known to the employee as a result

of his or her employment;

theft (including minor theft), embezzlement, misappropriation,

intentional damage or destruction of property by an employee at the

workplace, as confirmed by a court judgment.

a breach by an employee of labour protection requirements (i.e. work

safety), where the breach has resulted in severe consequences (e.g. an

industrial accident or disaster) or created a real danger of such this and

the breach has been confirmed by the Labour Protection Commission.

The procedure for terminating employment on grounds of gross misconduct

is essentially the same as for repeated non-fulfillment of job duties. However,

in most cases of gross misconduct the employer must have supporting

documentation to justify termination (e.g. a court ruling is required to

prove theft; a ruling of an authorised body is required to certify violation of

labour protection rules; and a medical certificate is required to confirm an

employee was in a state of alcoholic intoxication).

As an alternative to all of the above, the employer and employee may at any

time during employment agree on termination by mutual agreement. This

option considerably reduces the risks to the employer of claims against it.

Note that the employer must ensure that no pressure is put on the employee

to agree, but that otherwise, the law does not regulate how negotiations

should be conducted between the employer and the employee. Usually,

the parties conclude an employment termination agreement specifying the

terms and conditions of employment termination. Often, compensation will

be paid to an employee, but there are no legal requirements about this or

about the amount.


Notification of employee representatives

If the employee to be dismissed is a member of the employee representative

body (e.g. a trade union delegate), the employer must notify the employee

representatives upon dismissal by submitting to it a draft of the order made

by the general manager (or other authorised officer), along with documents

justifying the dismissal (e.g. the employee’s appraisals). Within seven

working days of receipt of these documents, the employee representatives

will submit their opinion of the dismissal. If they do not agree with the

decision to dismiss the employee, they will ask for a consultation with

the employer to try to find a common position. If this does not work, the

employer will be entitled to make its own decision.


Certain categories of employees enjoy special protection against dismissal,

such as pregnant women and employees under 18. In addition, employees

cannot be dismissed while they are absent from work on sick leave or other

leave.

Formalities

Dismissal on any ground must be formalised by an order of the general

manager or another authorised officer. The employee must be made aware

of the order and asked to sign it in acknowledgement. If the order cannot

be brought to the notice of the employee or if the employee refuses to sign,

a note must be made on order to record these facts.

On the day of termination the employer must hand over the employee’s

labour book and pay the employee all amounts owing.

If the employee so requests, the employer should also give the employee

copies of documents relating to the employment.



If the employee considers his or her dismissal unfair, the employee may file

a claim with the court and request reinstatement at work. The employee

must file a claim for unfair dismissal within one month of receiving a copy

of the order on dismissal or the labour book. If the employee is claiming the

dismissal was unfair, the court may order reinstatement of the employee in

the same job, along with financial compensation for forced absence in the

amount of the employee’s average salary for the period of absence.

An employee can claim moral damages, either as well as reinstatement or

separately. If the employee claims the dismissal was unfair, the courts may

award compensation for moral harm. However, the sums awarded are not

significant.

Employees can also make a claim to the State Labour Inspectorate. The

Inspectorate can conduct an inspection of the employer and check its

activities for general compliance with Russian labour law.


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There is no general definition of low performance in Spanish law. The only

reference to low performance relates to the dismissal of an employee on

disciplinary grounds based on deliberate and continuous low performance.

In general terms, an employee could be classified as a low performer if

the employee does not perform to the best of his or her ability and the

performance is significantly below the average performance of comparable

employees. The comparison should prove that the employee is deliberately

performing under his or her capabilities.

It can be particularly difficult to prove a low performance in jobs where it is

hard to measure the requirements of the job objectively.

Note that an employee is not required by law to be successful or to perform

to an objectively determined standard, but simply to perform. The law does

require employees to perform their duties in good faith.


There is no legal and objective measure for assessing low performance.

Performance should be measured based on what is agreed in the contract,

the applicable collective bargaining agreement or other sector regulations,

or the standards set by the employer.

The employer may compare the performance of employees engaged in the

same activity in a similar position. If it is not possible to do a comparison of

this kind, the employer may be able to make use of previous data relating

to the same employee.


Low performance should be documented so that any measures taken as

a result (e.g. a warning or termination) can be justified. Documentation

is also essential for successful litigation, as the burden of proof for low

performance is on the employer.

For a dismissal based on low performance to be fair, the courts usually

require the employer to be able to prove the facts in detail. Therefore,

employers should use objective data and accurate performance figures, if

possible, covering the average performance of other employees. This kind

of information may only be available in certain sectors. Proof of delivery of

the termination letter should also be provided as part of the documentation.

Generally, dismissals based on low performance grounds are difficult to

prove, as the standard of proof is hard to meet.



There are no statutory standards or processes in Spanish law in relation to


There are some collective bargaining agreements in industrial sectors

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that contain performance-related bonuses. These can be based on the

performance of a department, factory, or individual. Some organisations

also give bonuses or extra payments to employees based on targets, but

there are no general rules legal rules about this, except that the targets must

be suitable and realistic.

These measures are intended to be a positive incentive for employees, but

in the case of low performance, they can be used to make comparisons.

However, the fact that an employee does not reach the target for a bonus

payment does not mean that person should be considered as a low

performer.



By law, an employee can be dismissed on disciplinary grounds if there is a

continued and deliberate decrease in the normal or agreed performance. This

involves an unjustified decrease in performance that is either permanent or

continues for a significant period. This should exclude any decrease for other

reasons (e.g. strikes, lack of raw materials or disruption to the production

process). In particular, dismissals of this kind must be distinguished from

dismissals due to failure to adapt to changes in the workplace. (Note that if

there is no decrease, but performance has been poor from the outset, it will

normally have been open to the employer to terminate the employee during

the probationary period.)

In general terms, an employee could be classified as a low performer

if the employee does not perform to the best of his or her ability and the

performance is significantly below the average performance of comparable

employees. The comparison should prove that the employee is deliberately

performing below his or her capabilities.

Performance should be measured based on what is agreed in the contract, the

applicable collective bargaining agreement or other sector regulations, or the

standards set by the employer.

The employer may compare the performance of employees engaged in the

same activity in a similar position. If it is not possible to do a comparison of

this kind, the employer may be able to make use of previous data relating to

the same employee.

The low performance must be deliberate, which is difficult to prove. This

intentional low performance could be the result of fraud or negligence, for

example.

Low performance is not sufficient to justify a dismissal if there are mitigating

circumstances, such as a long career with reasonable performance, no prior

sanctions, poor condition of equipment, changes in the organisation or illness.

There is no justification for dismissal if the low performance is not continuous,

as it needs to have gone on for some time to be considered a fault. The

length of time necessary will depend on the specific circumstances of each

case including the type of job and the industry.

For a dismissal based on low performance to be fair, the courts usually

require the employer to be able to prove the facts in detail. Therefore,

employers should use objective data and accurate performance figures, if

possible, covering the average performance of other employees. This kind of

information may only be available in certain sectors. Proof of delivery of the

termination letter should also be obtained.

Generally, dismissals based on low performance grounds are difficult to prove,

as the standard of proof is hard to meet.


To dismiss an employee, the employer must deliver a dismissal letter stating

the legal grounds for the dismissal. If the employee refuses to accept the

dismissal letter, the employer needs two witnesses (other than the person

who signed the dismissal letter) to write a statement in the dismissal letter

in Spanish to the effect that they witnessed the employee receiving the

dismissal letter but that he or she refused to sign it.

If the employee disagrees with the dismissal, he or she must file a claim

(‘papeleta de conciliación’), within 20 business days, before a special

administrative body (‘SMAC’). A preliminary conciliation meeting will be

held within approximately 15 to 20 days following the date of the claim,

at which the parties will be encouraged to reach an agreement. Agreement

would be based on the employer’s acceptance that the dismissal is unfair

and the employee’s acceptance of an agreed severance payment. If the two

sides agree, the contract will be validly terminated with effect from the date

of delivery of the dismissal letter.

The maximum legal severance payment is equivalent to 45 days’ salary per

year of service to a maximum of 42 months’ pay up to 12 February 2012 and

33 days’ salary per year of service to a maximum of 24 months’ pay since 12

February 2012. The agreement must be signed before the SMAC, otherwise

the severance payment will become subject to tax and the employee will not

be entitled to claim unemployment benefit.

If the parties fail to reach an agreement after the conciliation process has

taken place, the employee will need to file a claim in the Labour Court.

However, if the employer has offered the maximum legal severance payment

during the conciliation process, it will not be worth claiming in court.



If a dismissal is considered ‘unfair’ (i.e. the employer is not able to prove the

low performance, or it does not exist), the employee can claim an indemnity

of 45 days’ salary per year of service for service (with a maximum of 42

months’ pay) up to February 2012, plus 33 days’ salary per year of service

(with a maximum of 24 months’ pay) from March 2012 up to the dismissal

date.

Further, the employer could choose to reinstate the employee. The employee

would be entitled to salary accrued between the termination date and the

date of return to work.

The employee must be reinstated if the court declares the dismissal void. This

might happen if the dismissal was discriminatory by reason, for example, of

disability, age, race, ethnic origin, gender or religion.

Any dismissal of a pregnant woman, even without the employer’s knowledge

of the pregnancy, or a person working on reduced hours so as to care for

children up to 12 years old, will be automatically void. Reinstatement is

mandatory in these situations.


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There is no statutory definition of a ‘low performer’, and so it can be difficult

to establish whether or not an employee’s performance warrants action

being taken. Action should only be taken if the employer can demonstrate

that an employee is falling below its reasonably required standards.

The employee should be made aware of the standards expected at the

outset of the employment. Failing to reach the required standard can

manifest itself by a failure to produce the required quality of work, or a

failure to produce the required quantity of work. It can also relate to a

poor attitude which impacts the employee’s ability to form good working

relationships with their colleagues or clients.


There is no objective measure that can be used to assess low performance,

and there are no statutory thresholds. The factual matrix surrounding the

employer, the employee, and the work expected to be carried out need to

be considered together when assessing performance.

In determining whether an employee is a low performer, consideration

should be given to the type of work being carried out, the length of time the

employee has been in the job, previous quality of work, and the standard the

employee is expected to meet. All of these considerations should enable the

employer to determine whether the employee is performing to the required

standard. Comparisons with other employees are not always necessary to

establish whether the required standard is being reached and employers will

typically focus on the facts relating to the individual employee.

Does low performance need to be documented?

There is no legal requirement to document poor performance. However,

where an employer seeks to dismiss a low-performing employee, the

burden is on the employer to show that the employee’s performance was

the reason for the dismissal. The employer will need to show that it had

reasonable grounds to believe that the employee was failing to meet the

standards of performance required, and that it had taken reasonable steps

to verify its conclusions. To this end, evidence of low performance should be

documented to support the employer’s position. In the event of an unfair

dismissal claim, the Tribunal will look to this evidence when determining

whether the employer’s belief was genuine and reasonable.

The employee’s appraisals will normally be the main documents detailing

poor performance. These documents may collate feedback from colleagues

and clients, providing a more rounded view of the employee’s performance.

Should low performance lead to a formal process, documents such as

Performance Improvement Plans (‘PIPs’) will also need to be kept, along

with any interim reviews, performance records, and subsequent evaluations.

PIPs should cover an appropriate period of time to allow the employee to

improve, and support should be given to facilitate this improvement.

Appraisals and related documents will be important evidence in justifying

any decisions to dismiss, and will likely be disclosable in any subsequent

litigation.

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The UK’s Advisory, Conciliation, and Arbitration Service (ACAS), the employer,

and implied contractual terms all impact the process. ACAS issues guidelines

on performance management and also a code of practice on disciplinary

and grievance procedures, which are relevant if the employee is disciplined

for poor performance. Tribunals will look favourably on employers who have

followed ACAS’ guidance. A failure to do so may result in any damages

awarded by a Tribunal being increased by up to 25%.

Companies may also have internal policies and if these have not been

followed, this may result in a claim of unfair dismissal (i.e. a claim that

dismissal was for an unfair reason or was done using an unfair process).

The contract will also have implied terms governing the employment

relationship. One implied term is that of mutual trust and confidence

between the employer and the employee. A potential example of a breach

of this term could be an employer reprimanding an employee loudly in a

public area in front of other staff.

Procedurally, and to ensure compliance with guidance, internal policies and

the contract, it is common for organisations to conduct regular appraisals,

reviewing an employee’s targets for the previous period and setting new

objectives for the future. These targets should be determined in conjunction

with the member of staff who is conducting the appraisal. Any objectives

should be clear enough to enable an evaluation of the extent to which they

have been reached at the end of the period.

Where the appraisals suggest that an employee is lacking the ability to carry

out their duties, best practice would be for the employee’s manager to raise

concerns informally and verbally at first. They should not initially form the

basis of any formal hearings. If concerns remain, the decision may be taken

to invoke a formal procedure at a later stage.

It is important to note that an employee typically only accrues the right to

claim unfair dismissal after two years’ continuous service with the employer

(with some limited exceptions). Before then, it is much easier to dismiss

an employee for poor performance. In cases where an employee has not

accrued unfair dismissal rights, no formal process needs to be taken to

demonstrate that the decision to dismiss for poor performance is justified.

In cases where the employee is within a ‘probation period’, the notice period

may be even shorter, making it much easier to dismiss underperformers.



For these purposes we shall focus on underperforming employees who have

two years’ continuous service with the employer and have therefore accrued

the right to bring a claim against the employer for unfair dismissal.

Dismissal is justified if the employee’s lack of capability means that they

cannot perform their job to the required standard. To avoid a claim of unfair

dismissal, the process followed before dismissing an employee must be fair.

The Advisory, Conciliation, and Arbitration Service, ‘ACAS’ recommends

that at least two formal warnings should be given to an underperforming

employee before they are dismissed for poor performance, unless the

underperformance includes an act of gross negligence. The circumstances

in which a single act can warrant dismissal are rare.

In most cases, the employee must have been given a reasonable timescale

for improvement. The adequacy of the timescale will be dependent on the

facts of the case. The first place to look for a timescale will be any capability

procedure the employer may have. The industry standard will also need to

be considered. The quality and length of the employee’s past service should

also be taken into account. An employee who has worked for a number

of years at the required standard should be given a longer period of time in

order for any performance dismissal to be justified.

Depending on the type of work that is undertaken, relevant and reasonable

support or training may also need to be provided. For example, the

installation of a new IT system should be followed up by training to ensure

that the employee has an opportunity to achieve the required standard.

In order to satisfy the requirement of fairness, the employer will need to

review progress, set measurable targets, and take an active involvement in

the improvement process.


An employer should abide by statutory and contractual notice provisions

when terminating an employment contract to avoid a claim of wrongful

dismissal. However, if the employee’s lack of capability is so significant as

to amount to a fundamental breach of contract, no notice is required. This

will be unusual in practice.

In order to avoid an employee succeeding in a claim of unfair dismissal

(which they can make if they have two years’ continuous service with the

employer), the employer must follow a fair process and should comply with

the guidance issued by the Advisory, Conciliation, and Arbitration Service

(ACAS). Although a termination can be completed without following a fair

process, this increases the likelihood of a successful claim.

It will be particularly important to make sure that an employer avoids any

potential claims of discrimination. Damages are capped for unfair dismissal

claims, but this is not the case where the dismissal is also discriminatory.

Therefore, the employer must ensure that the dismissal was a result of the

employee’s capability, rather than any underlying protected characteristic

(such as race, age or disability). Underperforming employees should be

treated consistently.

If an employee is falling below the required standard, initially any warning

from the employer should be informal and verbal. However, if, after the

discussion, the performance remains below the required standard, a formal

procedure can be invoked. The formal procedure will typically involve up to

three capability meetings (depending on whether the employee improves)

before dismissal.

The employer should invite the employee in writing to a formal capability

hearing. The invitation should include the employer’s concerns regarding

performance, the reasons for those concerns, and the likely outcome

if performance is deemed unsatisfactory. The meeting should be kept

confidential, and the employee should be given the right to be accompanied

by an employee or trade union representative.

At the capability meeting, the employer should tell the employee its

concerns and give them an opportunity to respond. Documents may be

useful in illustrating the concerns, and any documents created as part of

the meeting should be kept on file. At the first capability meeting, if the

employee’s performance is deemed to be below the required standard,

they should be given a written warning which includes the areas in which

they have not met the required performance standards, the targets for

improvement (under a Performance Improvement Plan, or PIP), any measures

(such as additional training or supervision) which will be taken with a view

to improving performance, a period for review, and the consequences of

failing to improve within the review period. The employee should be given

a right of appeal.

If, following the period for improvement, the employer decides that the

performance has remained below the required standard, they should invite

the employee to a second capability meeting (following the process detailed

above), and give them a final written warning if necessary. If, following


31

a final written warning and subsequent third hearing, the employer finds

that the employee’s work standard has still not improved sufficiently, the

employee may be dismissed or, if the size and administrative resources of the

employer are large enough and the contract permits it, redeployed to a less

demanding role. The employer should give the employee the right to appeal

the decision to a more senior manager.



If the employer fails to follow a contractual disciplinary or poor performance

procedure, this may give rise to claims for breach of contract, as well as

supporting a case for unfair dismissal. In circumstances where an employee’s

resignation is justified through the employer’s fundamental breach of

contract, the employee may claim that they have been constructively

dismissed. This can lead to a claim of unfair dismissal (provided the

employee has two years’ continuous service at the employer).

Unfair dismissal claims may also arise where the employee is dismissed

for genuinely poor performance but the correct procedure has not been

followed. A dismissal may be unfair if allegations of poor performance

were unfounded, no prior warning was given, no reasonable timescale for

improvement was given, or targets set for improvement were not realistic.

However, if it is found that the employee would have been dismissed

anyway, even if the procedure had been fair, the damages awarded by a

Tribunal may be reduced to reflect this.

If the poor performance is related to a disability, the employer may be

exposed to claims of disability discrimination. This makes it very important to

ascertain all the facts of the case from an early stage and to consider making

reasonable adjustments. Other claims of discrimination may arise if two

employees are underperforming and only the employee with a protected

characteristic is disciplined. In addition, where the poor performance issue

is raised in an oppressive or heavy-handed manner, harassment may be

alleged by the employee.


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There is no general definition for a low performer under US labour and

employment laws. Accordingly, employers can exercise their discretion in

assessing whether an employee is performing his or her job at an acceptable

level. Employers may consider the following factors (among others) in making

an assessment:

Whether the employee is able to perform all the functions of the job

(these may be contained in the job description).

Whether the employee consistently adheres to company policies.

If the employee’s functions include a production target, the employee’s

ability to meet it.

Whether the employee acts professionally towards co-workers, clients,

customers, third-party vendors and others.

An employer’s ultimate objective is to ensure that its employees’ performance

satisfies the employer’s reasonable expectations. If an employee’s

performance falls below this standard, he or she may be considered a ‘low

performer’.


There are no objective measures of low performance under US labour and

employment laws. However, adopting objective performance standards

and ensuring these are applied uniformly will help the employer defend

against a claim of unlawful dismissal. Employers may use a variety of factors

to determine whether an employee is meeting performance expectations,

including the type of work being carried out, the length of time the employee

has been in the job, previous quality of work, and the standard the employee

is expected to meet. All of these considerations should enable the employer

to determine whether the employee is performing to the required standard.

Comparisons with other employees are not always necessary to establish

whether the required standard is being reached and employers will typically

focus on the facts relating to the individual employee.


There is no statutory requirement to document low performance, but it is

generally advisable to do so for evidentiary reasons.

Most employees in the US are non-unionised and employed ‘at will’,

meaning that an employer can terminate an employee for ‘a good reason,

bad reason, or no reason at all.’ However, at-will employment is not without

limits. Federal, state, and local laws in the US still prohibit employers from

terminating employees for ‘unlawful’ reasons, and this limitation highlights

the importance of documenting low performance.

For example, all private employers – whether or not their workforce

is unionised – are precluded by federal, state, and/or local law from

discriminating against their employees based on the employees’ race,

gender, religion, national origin, sex, disability, veteran status, genetic

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information, pregnancy, use of statutorily-protected medical leave, or

any other status protected by law. . Some state or local laws may protect

additional characteristics. Federal, state, and local anti-discrimination laws

also prohibit employers from taking adverse action against employees for

complaining about discriminatory treatment, as this can amount to unlawful

retaliation. If employers fail to document employees’ low performance,

problems can arise if an employee brings a claim against the employer for

discrimination. Documentation showing low performance can amount to

evidence that the employer had a legitimate reason to take action against

the employee.

It is particularly important to document why sanctions are imposed on

an employee where the workforce is unionised. Almost every collective

bargaining agreement with a union will contain a provision to the effect that

the employer can only discipline or dismiss employees for ‘just cause’. This

means there must be sufficient evidence showing that the employee violated

an employer policy, practice, or procedure. Whether an employer has just

cause will be decided by a third-party arbitrator selected jointly by the union

and the employer. We therefore highly recommend any low performance

issues be documented when dealing with unionised employees.



There are no statutory standards or processes under US labour and

employment laws in relation to performance management. However,

conducting annual performance reviews is an effective way to ensure an

employee performs his or her job duties at an acceptable level. Informal

counselling and documented disciplinary action are added methods of

ensuring an employee is performing at an acceptable level.



Low performance is a recognized basis to discipline an employee, up to

and including termination. However, in terms of justifying dismissal, what

is required of the employer varies according to whether the employees are

unionised, as described below.

Non-union private employers

We recommend the employer complete a disciplinary form setting out the

low performance in detail. In addition, the employer should meet with the

employee to discuss the disciplinary issue. At least one of the individuals

making the decision to discpline the employee (e.g. supervisor or manager)

should be present with at least one witness during the disciplinary meeting.

At the end of the hearing, the employer’s representative should ask the

employee to sign and date the disciplinary form. It should also be signed

and dated by the employer’s representative present at the meeting. If the

employee refuses to sign, the employer’s representative should note the

refusal on the form.

Finally, if the disciplined employee wants to respond to the allegations

contained on the form, the employer should advise the employee to do so

in writing.

Private employers with unionised workforces

Almost every collective bargaining agreement will contain a provision to

the effect that the employer can only discipline or dismiss employees for

‘just cause’. This means there must be sufficient evidence showing that the

employee violated an employer policy, practice, or procedure. Whether an

employer has just cause will be decided by a third-party arbitrator selected

jointly by the union and the employer. A just cause analysis usually takes

into account the following considerations:

Did the employee have notice that his or her actions could subject

him or her to disciplinary action? Notice can be established

through evidence of the employee’s receipt of employer policies and

procedures; training records; annual performance reviews summarising

the employee’s performance during the review period, including any

deficiencies in performance; and informal counselling of employees

about performance problems.

How serious was the employee’s misconduct? A gross violation of

employer policies or practices (e.g. theft, use of illegal drugs or criminal

acts) is more likely to be considered just cause for summary dismissal.

Did the employer use progressive discipline? For less serious violations

such as generally poor performance, the discipline is more likely to

be upheld if the employer first took less serious disciplinary action

before ultimately dismissing the employee. For example, a first breach

of a given policy would result in a verbal warning, a second breach

would result in a written warning and a third breach would lead to

suspension. A fourth violation would result in termination.

Did the employer’s investigation meet due process requirements?

A thorough investigation into an employee’s alleged wrongdoing

includes taking witness statements and meeting with the employee to

inform him or her of the alleged wrongdoing and give the employee

an opportunity to respond. The specific policies and procedures that

were breached should be set out in the disciplinary form, along with

a detailed description of why the employee’s performance breached

the rules. The investigation should be completed in a timely manner.

Were the policies that the employee breached enforced consistently

and in a non-discriminatory manner? Sporadic enforcement, or

imposing harsher discipline on employees who more actively engage

in union activities, will weigh against a finding of just cause.

However, what constitutes just cause, and how much weight is afforded

to the above considerations, can vary greatly. Also, if the employer has

dismissed the employee, many arbitrators will impose a higher evidentiary

burden of proof on the employer.


Before terminating an employee, the employer should go through the

processes set out below. These vary according to whether the employee is

unionised or not.

Non-union private employers

We recommend including the following information on the disciplinary form

documenting the low performance:

the employee’s name, job title and department;

the policy or performance standards breached;

the dates of each breach;

the date the employee was disciplined;

a description of the incidents giving rise to the discipline, including

how the policy or performance standard was breached;

the type of sanction being used against the employee (e.g. written

warning, suspension or termination);

if any previous sanction has been used against the employee, the date

and type of sanction.

In addition, the employer should meet with the employee to discuss the

disciplinary issue. At least one of the individuals making the decision to


34

discipline the employee (e.g. supervisor or manager) should be present

with at least one witness during the disciplinary meeting. At the end of

the hearing, the employer’s representative should ask the employee to sign

and date the disciplinary form. It should also be signed and dated by the

employer’s representative present at the meeting. If the employee refuses

to sign, the employer’s representative should note the refusal on the form.

Finally, if the disciplined employee wants to respond to the allegations

contained on the form, the employer should advise the employee to do so

in writing.

Private employers with unionised workforces

Almost every collective bargaining agreement will contain a provision to

the effect that the employer can only discipline or dismiss employees for

‘just cause’. This means there must be sufficient evidence showing that the

employee violated an employer policy, practice, or procedure. Whether an

employer has just cause will be decided by a third-party arbitrator selected

jointly by the union and the employer. A just cause analysis usually takes

into account the following considerations:

Did the employee have notice that his or her actions could subject

him or her to disciplinary action? Notice can be established through

evidence of the employee’s receipt of employer policies and procedures;

training records; annual performance reviews summarising the

employee’s performance during the review period, including any

deficiencies in performance; and informal counselling of employees

about performance problems.

How serious was the employee’s misconduct? A gross violation of

employer policies or practices (e.g. theft, use of illegal drugs or criminal

acts) is more likely to be considered just cause for summary dismissal.

Did the employer use progressive discipline? For less serious violations

such as generally poor performance, the discipline is more likely to

be upheld if the employer first took less serious disciplinary action

before ultimately dismissing the employee. For example, a first breach

of a given policy would result in a verbal warning, a second breach

would result in a written warning and a third breach would lead to

suspension. A fourth violation would result in termination.

Did the employer’s investigation meet due process requirements?

A thorough investigation into an employee’s alleged wrongdoing

includes taking witness statements and meeting with the employee to

inform him or her of the alleged wrongdoing and give the employee

an opportunity to respond. The specific policies and procedures that

were breached should be set out in the disciplinary form, along with

a detailed description of why the employee’s performance breached

the rules. The investigation should be completed in a timely manner.

Were the policies that the employee breached enforced consistently

and in a non-discriminatory manner? Sporadic enforcement, or

imposing harsher discipline on employees who more actively engage

in union activities, will weigh against a finding of just cause.

However, what constitutes just cause, and how much weight is afforded

to the above considerations, can vary greatly. Also, if the employer has

dismissed the employee, many arbitrators will impose a higher evidentiary

burden of proof on the employer.



An employee has a number of remedies available for monetary

compensation. In non-unionised workplaces, the employee can claim under

state and federal anti-discrimination and anti-retaliation laws seeking lost

wages and benefits, back pay, front pay, compensatory or punitive damages

(or both), and liquidated damages. Note that many anti-discrimination laws

have caps on the amount of compensatory or punitive damages that an

employee can recover. The amount of the cap will vary depending on how

many employees the employer has.

The employee can also seek similar relief if the employer does not compensate

him or her in accordance with federal, state, or local wage-and-hour laws.

In making any of these claims, employees may also be entitled to recover

legal fees incurred in litigating the dispute.

Employees may also claim reinstatement if the termination is found to be

unlawful. Reinstatement does not preclude the employee from recovering

monetary damages from the employer.

BELGIUMClaeys & Engels

280 Boulevard du Souverain

1160 Brussels

Belgium

T +32 2 761 46 00

F +32 2 761 47 00

www.claeysengels.be

FRANCECapstan

83 rue La Boétie

75008 Paris

France

T +33 1 44 95 48 00

F +33 1 45 63 99 62

www.capstan.fr

NETHERLANDSBronsgeest Deur Advocaten

De Lairessestraat 137-143

1075 HJ Amsterdam

The Netherlands

T +31 20 305 33 33

F +31 20 305 33 30

www.bd-advocaten.nl

BRAZILVeirano Advogados

Av. Presidente Wilson, 231-23rd Floor

Rio de Janeiro 20030-021

Brazil

T +55 21 3824 4747

F +55 21 2262 4147

www.veirano.com.br

GERMANYKliemt & Vollstädt

Speditionstrasse 21

40221 Dusseldorf

Germany

T +49 211 88288 0

F +49 211 88288 200

www.kliemt.de

ITALYToffoletto De Luca Tamajo e Soci

Via Rovello, 12

20121 Milan

Italy

T +39 02 721 44 1

F +39 02 721 44 500

www.toffolettodeluca.it

POLANDRaczkowski Paruch

ul. Bonifraterska 17

00-203 Warsaw

Poland

T +48 22 380 42 50

F +48 22 380 42 51

www.raczkowski.eu

UNITED KINGDOMLewis Silkin LLP

5 Chancery Lane, Clifford’s Inn

London EC4A 1BL

United Kingdom

T +44 20 7074 8000

F +44 20 7864 1200

www.lewissilkin.com

RUSSIAALRUD Law Firm

6th Floor - 17 Skakovaya Street

125040 Moscow

Russia

T +7 495 234 96 92

F +7 495 956 37 18

www.alrud.com

UNITED STATES FordHarrison

271 17th Street NW, Suite 1900

Atlanta, Georgia 30363

USA

T +1 404 888 3800

F +1 404 888 3863

www.fordharrison.com

MEXICOBasham, Ringe y Correa S.C.

Paseo de los Tamarindos No.

400-A, 9th Floor

Bosques de las Lomas

05120 México D.F.

México

T +52 55 5261 0400

F +52 55 5261 0496

www.basham.com.mx

SPAINSagardoy Abogados

C/Tutor 27

28008 Madrid

Spain

T +34 91 542 90 40

F +34 91 542 26 57

www.sagardoy.com

www.iuslaboris.com www.globalhrlaw.com

280 Boulevard du Souverain 1160 Brussels-Belgium

[email protected] + 32 2 761 4610

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