Performance Issues at Work
If your performance at work is being criticised by your employer then your employer might start a performance improvement process (also known as a “performance improvement plan” or “PIP”). If your employer starts a performance improvement plan then employees have rights that they can use to their advantage
Read our guide on performance improvement issues below
What does performance issues at work mean?
Employers can raise issues with employees whose work does not meet the standard required, as there is an implied term in every contract of employment that an employee will perform their role to the minimum standard required. What this standard is will vary from role to role and can encompass not only the technical aspects of a job, but also subjective aspects such as an employee’s ability to interact with clients.
In addition, there is likely to be express terms incorporated into a contract of employment which could include things such as sales and/or performance targets. Finally, there could be industry wide standards of performance than any employee working in that industry would be expected to adhere to.
What process should an employer follow in dealing with performance issues?
An employer should follow this process in starting a performance improvement process:
- Deal with the performance issues informally
- Start an investigation into the alleged underperformance
- Deciding whether there is a case to answer
- Starting a formal performance improvement process
Dealing with the performance issues informally
At the outset an employer should ideally attempt to deal with any performance issues on an informal basis. If this is not successful (or not appropriate because the poor performance is serious in nature, for example, represents a breach of Health & Safety legislation) the ACAS code provides guidance to employers to ensure that performance issues are dealt with fairly at work and these should be followed as a minimum.
Starting an investigation into the alleged underperformance
An employer should begin by investigating allegations of poor performance to establish the facts and substantiate any allegations of poor performance prior to taking any further action (such as implementing a PIP at work). This could be, for example, gathering documentary evidence or witness statements corroborating any allegations of poor performance.
Deciding whether there is a case to answer
If an employer decides that there is a disciplinary case to answer, the employee should be advised in writing as to the nature of the poor performance and the possible outcome of the performance improvement process (for example, a written warning). They should also be provided with all the information collated during the investigation. The employee should be advised of the time and date of the hearing and their right to be accompanied by a work colleague, trade union representative or an official employed by a trade union.
After the capability hearing an employer should decide what further steps to take – this could include, for example:
- Whether there is no case to answer and whether the process should be dropped;
- Whether to take any formal disciplinary action at that stage (such as, for example, a warning);
- Whether a performance improvement process (commonly known as a ‘PIP’) should be started
Dropping the allegations of poor performance
Your employer may decide that there is no case to answer and drop the allegations against you.
Warning for poor performance
If an employer decides that a warning is appropriate, the warning should set out the nature of the poor performance along with the improvement expected and the timeframe for the improvement to occur. What is a reasonable timescale is fact-specific and will depend on things such as the employee’s length of service, the extent and nature of the underperformance, and the impact it has had on the business. An employee should also be informed of the possible consequences of further poor performance (such as, potentially, dismissal).
Starting a formal performance improvement process
If your employer thinks that there is a case to answer and that you need to improve your performance then they may decide to start a formal performance improvement process. Further details of what a performance improvement process entails is laid out below.
Finally, an employee should be provided with a right to appeal any decision made as a result of the hearing. When advising the employee of their right to appeal an employer should also advise them of the time limit to appeal (the Acas code recommends no less than 5 days) and the appeal should be dealt with by someone who was not involved in the original decision.
An unreasonable failure to follow the Acas code may result in compensation being increased or decreased by up to 25% if you are dismissed for poor performance.
Speak to one of our expert employment solicitors about your case
If you think that you have been unfairly dismissed because of performance concerns – or that you may be unfairly dismissed because of performance concerns that have been raised by your employer – then call one of our expert employment solicitors today for a free consultation to discuss your case
What is a Performance Improvement Plan (or ‘PIP’)?
A PIP is commonly used by employers to manage underperformance of an employee. It can be used alongside disciplinary action or instead of it. It should always be in writing and should ideally state the following:
- The areas of performance that need improving.
- The improvement expected using measurable objectives.
- Detail any training or support to be offered to assist in improving performance.
- The timescales for performance to improve.
- The frequency of reviews of performance.
- What sanctions will be imposed if performance does not reach the required standard at the end of the PIP process.
What are your rights when participating in a performance improvement plan?
Your rights when participating in a performance improvement plan are:
- Right to know why you have been selected for the PIP
- Right to receive objective evidence showing that you are underperforming
- Right to mentoring and training
- Right to be given a reasonable opportunity to improve your performance
- Right to appeal against any decision
Case study – Miss Ludwiczak v Your Square Limited (3200758/2018)
In this case the Employment Tribunal held that the allegations of poor performance that had been made were a sham, and that the real reason for the claimant’s dismissal was her pregnancy. The Employment Tribunal awarded the Claimant over £27,000 in compensation
Read our analysis of the case here
How long should a review period last under a PIP?
That depends on what is reasonable considering all of the circumstances, including the needs of the business and the nature of the targets for improvement.
Should you sign a PIP if you don’t agree to it?
No. Signing a PIP indicates an employee’s acceptance of the performance allegations and PIP process. By signing it you will be seen as consenting to it which could hinder any argument later on down the line that the decision to place you on the PIP in the first place was unfair. Not only would we recommend not signing a PIP you do not agree with, you should also put in writing the fact that you do not consent to being placed on a PIP and the reasons why. If you are unable to resolve matters with your employer informally, it could made sense to raise a grievance about the decision to place you on a PIP. Even if you are not asked to sign a PIP, it still might make sense to detail your objections to being placed on it in writing so as not to be seen as consenting to the process by failing to object to it.
Warning signs that a PIP is unfair
PIPs can sometimes be used by employers to manage employees out of a business. An employee who has been employed for a long time with no previous record of performance issues (and/or good appraisals) may want to question why they are being placed on a PIP. Employees with new line managers they have a difficult relationship with (due to a clash of personalities, for example) can find themselves unexpectedly placed on a PIP. PIPs that contain unrealistic objectives or targets and/or timeframes for improvement could be inherently unfair and provide evidence that an employee is being ‘set up to fail’. Finally, employees that are put on PIPs that have been selectively chosen from a team of employees whose standard of work is all similar are likely to be able to validly argue that the decision to place them and them alone on a PIP is unfair.
Can you complain about being put on a PIP?
Yes. If you think the decision to put you on a PIP and/or the terms of the PIP are unfair you should try and informally resolve the situation with your employer in the first instance. If this does not work, you might want to consider raising a formal grievance in writing, especially if a possible outcome of a failure to reach the standards required by the PIP is your dismissal.
What is a medical issue is affecting your performance at work?
Sometimes an employee’s performance at work is affected by a medical condition and it is always worth asking your employer to take this into consideration when considering how they manage poor performance. It is also worth considering whether a medical condition is covered by the Equality Act 2010. Under this Act an employee is disabled if they have a ‘physical or mental impairment that has a long-term substantial adverse effect on their ability to carry out normal day-to-day activities’. If any employee is disabled under the Act, an employer may have to make reasonable adjustments to help an employee overcome difficulties caused by workplace arrangements and this may include providing additional support and/or training to the employee.
Is there any alternative to having to undergo a performance improvement plan?
If you do not want to undergo a performance improvement plan you might decide you would rather resign from your employment and try and find another job elsewhere. If you think the decision to put you on a performance improvement plan was unfair (for example, you dispute that there are issues with your performance and believe it is being used to ‘manage you out’ of a business for an alternative reason), you might have a claim for constructive unfair dismissal.
Should you stay or leave when facing a PIP?
If you enjoy your job but accept that there are issues with your performance and believe being placed on a PIP could benefit you in some way (for example, because you will receive additional training or support under the PIP), you might be happy to remain employed and participate in a PIP process. However, in our experience, most employees that face being placed on a PIP are unhappy about it and at the end of the process the relationship between an employee and employer has broken down to such an extent the employee finds it difficult to remain an employee and continue to work in a productive and constructive way at the end of the PIP process.
It is also important to note that being placed on a PIP might be a sign that an employee could be facing dismissal in the not too distant future and they therefore might decide it is preferable to leave of their own accord rather than be dismissed at some later date.
What to do if your employer offers you a settlement agreement to exit the company rather than being placed on a PIP
Some employers will offer employees a financial settlement to leave as an alternative to being placed on a PIP. This could be because they don’t believe placing the employee on a PIP will lead to the required improvement in the employee’s performance or could be because they recognise placing the employee on a PIP will lead to a breakdown in the relationship between the parties such that it will be irretrievably damaged.
If your employer does go down this route and you are interested in pursuing this option, we would recommend taking legal advice immediately to ensure that what they are offering you is a good deal and if not to try and negotiate a better one.
What if you would prefer to leave and not go through a PIP?
If you believe the decision to place you on a PIP was a fair one, but still don’t want to go through it, you can simply resign and move on. If you have concerns about the fairness of the decision to place you on a PIP and/or the nature or contents of the PIP, it might be possible to negotiate a financial settlement with your employer prior to leaving and as part of this negotiation we might advise you to raise a written grievance about the PIP. We would therefore always recommend taking legal advice prior to doing anything to make sure you put yourself in the best possible position if leaving if your preferred option.
The tactics of bringing a claim or reaching a negotiated settlement
If you have been accused of poor performance at work then how you will understandably want to see what your position is and how you can best protect your position.
Aside from trying to resolve the problem internally (see Action you can take if you are being sexually harassed at work) you generally have two options:
- Bring a claim in the Employment Tribunal; or
- Try to negotiate a settlement
Bringing an Employment Tribunal claim
Bringing an Employment Tribunal is normally a ‘last resort’, given the uncertainty of success of a claim in the Employment Tribunal, the stress caused, the time that such a claim takes, and the potential cost of the claim (if you instruct lawyers to help you). Equally, the Employment Tribunal is a public forum.
An Employment Tribunal is always an option, and it is a useful option, but it is normally the best option if you cannot resolve matters internally with your employer and/or cannot reach a settlement with them.
Negotiating a settlement
We normally recommend trying to see if a negotiated settlement can be reached with your employer, and we recommend that you try this before being dismissed or resigning from your job (if you feel that you can no longer continue to work for your employer). You are always going to be in a stronger negotiating position if you negotiate before resigning.
If you are successful with negotiating a settlement with your employer then a settlement agreement would normally be agreed – under this settlement agreement your employment will normally terminate (although this is not always the case) and, in return for you agreeing to not pursue any claims against your employer, you would normally be provided with financial and non-financial benefits – this includes
- Financial benefits: payment of your notice pay; any outstanding salary and holiday; plus compensation for termination of employment (which can normally be paid tax-free to you up to a maximum of £30,000);
- Non-financial benefits: this normally includes (among other things) your employer providing you with an agreed reference, an agreed announcement, mutual confidentiality clauses, and allowing you to retain company property (such as, for example, your company laptop or mobile phone)
It is always a good idea to seek expert legal advice from a solicitor before taking any steps (whether this is negotiating a settlement or bringing an Employment Tribunal claim), as any mis-steps (such as, for example, resigning before trying to negotiate) could damage your prospects of reaching a settlement that you are happy with.
If you fail the performance improvement plan, can you still negotiate a settlement payment?
Yes, if the decision to place you on the PIP in the first place wasn’t a fair one and/or if there are issues with the way the PIP process was handled.
What should you do if your dismissed without a settlement?
It is most probably sensible to appeal the decision to dismiss you and at the same time enter without prejudice negotiations with your employer to see if they are amenable to offering you a settlement. Employers often are as this saves them time and expense in dealing with an appeal and ensures they avoid an employment tribunal claim later on down the line.
Poor performance and unfair dismissal
An employee can be fairly dismissed for poor performance. Case law has established that a dismissal for poor performance will not be fair unless the following has happened:
- A proper investigation into the alleged poor performance has taken place
- The employee has been made aware of the problem and being given the opportunity to improve their performance within a realistic timescale
- The employee has been provided with the appropriate training and support to help them achieve the required standard
- The employees progress has been reviewed during the review period
- The employee has been offered a right of appeal against any decision to dismiss for poor performance
Examples of where a dismissal for poor performance might be unfair include:
- Targets set as part of a PIP are not realistic
- Allegations of poor performance were unfounded
- Unreasonable timeframes for improvements to performance given
It may be reasonable for an employer to consider alternative employment for an employee who is failing to perform at the required standard rather than dismissing them.
A failure by an employer to deal with poor performance in a fair and reasonable manner could give rise to a constructive unfair dismissal claim if an employee can show that the failure undermined the trust and confidence between the parties to such an extent that the felt they had no choice, but to resign.
Equally, if you are unfairly dismissed from your employment after a defective performance improvement process (or if there has been no performance improvement process at all) then you may have a claim for unfair dismissal.
Did you know?
You may be able to make a claim to the Employment Tribunal for unfair dismissal if you have been dismissed after a defective performance improvement process.
What compensation can you receive if you are unfairly dismissed for poor performance?
If you are successful with a claim for unfair dismissal in the Employment Tribunal then you can normally pursue the following kinds of compensation:
- A ‘basic award’ (which is equivalent to the value of a statutory redundancy payment)
- Any loss of earnings that you have suffered as a result of the dismissal that you have suffered (for example, the loss of basic salary or if you’ve lost out on a bonus);
- Any contractual sums that you are owed (unpaid wages, unpaid holiday pay, any accrued and outstanding commission etc.)
Examples of compensation awarded in unfair dismissal claims regarding allegations of poor performance
- Dr D MacQueen v Aromatic Flavours and Fragrances Europe Ltd and others: 3401473/2016 and 3325075/2017 – in this case the Employment Tribunal held that the failure to undertake a performance improvement process had been both unfair and discriminatory, awarding the Claimant £20,000 for injury to his feelings (read our analysis of this case here; read the Employment Tribunal judgment here)
- Miss Ludwiczak v Your Square Limited (3200758/2018) – in this case the Employment Tribunal held that the allegations of poor performance that had been made were a sham, and that the real reason for the claimant’s dismissal was her pregnancy. The Employment Tribunal awarded the Claimant over £27,000 in compensation (read our analysis of this case here; read the Employment Tribunal judgment here)
- Mr K Richards v David Smith T/a Future Joinery & Shop Fitters: 1600472/2019 – in this case the Employment Tribunal held that the claimant had been unfairly dismissed for poor performance where there was no evidence of such poor performance, awarding the claimant almost £30,000 in compensation (read our analysis of this case here; read the Employment Tribunal judgment here)
How we have helped clients when they have been accused of poor performance
We have included below details of case studies where we have helped clients that have been accused of poor performance at work:
- Redmans helps client to settle claim when accused of poor performance – Chris Hadrill, a specialist employment solicitor at Redmans, represented a client in settlement agreement negotiations, and secured an ex-gratia payment for the client