Employment law SOS: performance reviews

An employee's lack of capability to do the job they are employed to do is a 'potentially' fair reason for dismissal (section 98(2) (a) Employment Relations Act 1996). However, an employee who has been employed for a year or more is eligible to present a complaint for unfair dismissal in an employment tribunal. (With effect from April 2012, the government proposes to extend this to two years.) If an employee presents a complaint of unfair dismissal at tribunal, the employer must demonstrate that the genuine reason for dismissal was 'capability' – ie, poor performance. The tribunal must then go on to consider whether the employer acted reasonably when dismissing the employee due to poor performance. A critical part of demonstrating 'reasonableness' is for the employer to show that they followed a fair procedure, which complied with the Acas Code (which applies to poor performance dismissals as well as dismissals for conduct). The tribunal will consider many issues, including: l whether the employee knew what was being required of them l whether the employer provided proper training, supervision and encouragement l whether the employee was warned of the consequences of failing to improve l whether the employer gave the employee sufficient chance to improve. In some circumstances, the tribunal will also look at whether the employer considered moving the employee to alternative employment before taking the decision to dismiss them. Dealing with issues of performance and protecting against claims of unfair dismissal is significantly easier if a company has an effective written performance management procedure in place – and all employees and managers are familiar with it.