Dismissal for poor performance
Written by:
Hein Kernkamp
What is poor performance?
Poor performance or dysfunction is a form of incapacity of the employee. It also be described as incompetence, lack of skill knowledge, Incompatibility, bad attitude, Carelessness, in accuracy, incomplete work, poor social schools, and failure to comply with reasonable standards.
Poor Performance is one of the legal grounds for dismissal in the Dutch Civil Code (the d-ground). If an employee is unfit for work, the employer can submit a request to the subdistrict court judge to terminate the employment contract. All legal requirements neet to be met, to be able to ask the court to effectively dissolve the employment contract. For example, the poor performance should not be the result of illness or defects of the employee or of insufficient care of the employer for training or for working conditions.
What is a Performance Improvement Plan (PIP)?
A Performance Improvement Plan is not defined in the law. But it is a legal requirement that the employer must have informed the employee in good time that he is not functioning properly and the employer is required to give the employee the opportunity to improve his performance, which is usually laid down in written form in the so-called performance improvement plan (PIP).
In practice it was not always clear what the improvement process should consist of and how long it should take. And the discussion was of course also important, because the judge will reject a request for dismissal due to poor performance if the employer has not given the employee sufficient opportunity to improve his performance. In the Ecofys decision of 14 June 2019 the Netherlands Supreme Court has further elaborated on the requirements to which the improvement process must comply.
How must the employer give the employee the opportunity to improve?
The Netherlands Supreme Court has clarified that the law does not determine how the employer must have given the employee the opportunity to improve his performance. In view of the far-reaching consequences that a dissolution on the grounds of malfunctioning can have for an employee, the Netherlands Supreme Court decided that the employer must have offered the employee a serious and real opportunity for improvement.
According to the Netherlands Supreme Court, what help, support and guidance can be expected from the employer in a specific case to improve the employee's performance, and how this should be recorded depends on the circumstances of the case. The following may play a role in this:
- the nature, content and level of the position
- the education and experience present at the employee
- the nature and extent of the employee's incapacity
- the duration of inadequate functioning from the moment that the employee is informed of this
- the duration of the employment
- what has already been done in the past to improve functioning
- the extent to which the employee is open to criticism and is committed to improvement
- the nature and size of the employer's business
No 'one size fits all'
The Netherlands Supreme Court has given the employers guidance for what a performance improvement plan should consist of. With the listed points of view in mind, the employer will have to take care of an appropriate improvement process. Otherwise, dismissal for poor performance will not be an option. The good news is that improvement processes can and may look quite different and it should be possible to design a tailor made option that suits the company best.
Information
We regularly advise on improvement processes and the termination of employment in the Netherlands jurisdiction. We can support you in giving substance to the improvement process and the possible termination of employment, with or without the intervention of the court. If you have any questions, please contact us. Our motto is not for nothing: your problem, our concern.
More information?
Hein Kernkamp will gladly help you further.
