Managing poor performance, whether related to capability or attendance, raises a number of different issues for employers and their HR professionals. Failure to perform or attend may be related to the following factors, which may or may not be connected and which may not be readily apparent:
- Lack of application or misconduct on behalf of the employee;
- Lack of the required skills; and/or
- Illness or disability.
Although employees have a contractual responsibility to perform to a satisfactory level, it will be the identification of these underlying reason(s), which will determine how the poor performance should be managed and dealt with. It is therefore imperative that employers have flexible procedures in place to deal with substandard performance, the cornerstone of which should be that the matter has to be investigated in terms of gathering all the relevant evidence and information (including raising the issues with the employee and allowing them to comment) before any action (disciplinary or otherwise) is taken. Some employers believe that their disciplinary procedures are sufficiently flexible to deal with both misconduct and capability, while others prefer to operate separate capability and procedures. All employers, especially those with 15 employees or more, should have a policy in relation to the treatment of disabled applicants and employees.
If poor performance is due to lack of application (unconnected to an underlying medical condition) or following the falsification of qualifications and experience for the position that the employee holds or simply by a plain refusal to obey lawful orders, then it is appropriate to deal with the matter under normal disciplinary procedures for misconduct.
However, the disciplinary procedure may not be appropriate when dealing with employees who are failing through no fault of their own. Where the failure to perform is due to a lack of the required skills, following say a reorganisation or where an employee has been prematurely promoted, then the employee should be assisted, wherever practicable, with further training or coaching and given a reasonable period to reach the required standard. Some employers therefore prefer to operate a gentler capability procedure referring to cautions rather than warnings and greater flexibility with regard to timescales. In both cases, it is important to consider the following:
Identify the issues and the procedure to be adopted
The ACAS Code of Practice No 1 stresses the importance of having a known disciplinary procedure. Since the House of Lords decision in Pulkey v AE Dayton Services Ltd (1998) ICR 142, failure to adhere to a fair procedure will almost always lead to a finding of unfair dismissal, where the employee has the qualifying length of service for statutory protection.
Meeting with the employee
If the employee is falling short of the performance required of him or her, then a meeting should be arranged (of which the employee is given prior written notice and which contains details of the matters to be considered and also notifies him or her of their right to be accompanied by a colleague or trade union official). At the meeting, it is important that the employee knows what is required of him or her, the reasonable timescales that he or she will be given for improvement and the sanctions for failing to comply, including if necessary further disciplinary meetings. Further training, if practicable, should also be discussed and if appropriate, other alternative employment, although an employee should not be coerced into accepting a lower paid and/or lower status position without his or her consent.
Managing the process
It is seldom appropriate to dismiss an employee for a first breach of performance or attendance standards, unless there are external factors (such as a downturn in the economy) and the employee does not yet qualify for statutory protection and will not do so under the notice period of their contract of employment if dismissed in breach, say for example in respect of an employee under an initial short-term probation period. In most circumstances, the disciplinary or capability procedure will need to be continued, if the employee is unable to reach the required standard. The same factors will need to be considered as in the initial meeting, however the potential sanction for failure to reach the required standard will be higher such as a written or final written warning.
Most fair procedures allow for at least three such meetings prior to the decision to terminate the employee's contract. Disciplinary and capability procedures are sometimes used by certain employers as a method of 'managing out' poor performers and they impose rigorous timescales and often unrealistic improvements in an attempt to justify a fair dismissal on the grounds of capability. Although the Pulkey case above, highlights the pre-eminence of procedural over substantive fairness, such an approach is unlikely to impress a tribunal in the light of ACAS guidance, and is therefore only likely to be effective if accompanied by a mutually agreed departure settlement, which is the subject of a compromise agreement.
Lack of capability due to illness
One of the biggest difficulties facing HR professionals and employment lawyers is recognising when a disability is manifest but undisclosed. Employees may understandably feel reluctant to discuss the nature of their disability with their employer for fear of a prejudicial reaction. Although pre-medical screenings should elicit such information, these are costly and not widely used and are of no use in respect of existing employees. It is therefore important that employers have a procedure for helping to overcome this difficulty and which is implemented sensitively. The ACAS Code of Practice states that employers dealing with issues of genuine absence, they need to take into account the following factors:
- The likelihood of improved health and subsequent attendance (based on medical evidence);
- The availability of suitable alternative work;
- The affect of the absence on the employer's operation;
- How similar absences have been dealt with in the past;
- Any implications under the Disability Discrimination Act 1995.
Beyond this, employers need to open up a sympathetic and constructive dialogue with disabled employees. This does not mean that a disabled employee can never be dismissed or be the subject of a disciplinary procedure, but that any such action needs to be objectively justified in the light of all the circumstances and that the employer has satisfied its statutory duty to make reasonable adjustments for the employee.