Seven Steps for Dealing with Poor Performance in a Growing Business – Part Three

Last month I wrote about steps four and five of a seven stage process that you need to follow, when you have to deal with issues of poor performance in your business. Click here to read that blog again. If you missed steps one, two and three, you can read them here.

When you’re trying to reach a higher level in your business, you’re only as strong as your weakest member. Dealing with somebody in your team who doesn’t live up to the standards you require is difficult, both legally and ethically. Before you show an employee the red card, be sure you have tried everything that is expected from you, the employer, to guide them and push their performance to a higher level. To deal with the matter correctly, here are the remaining steps to follow:

Step 6: Agree a performance improvement plan

Where you have issued a warning, agree a written performance improvement plan with your employee. This will help you to formally identify unsatisfactory aspects of performance, agree on where further training, coaching, or other support could improve the matter and set new objectives or reiterate existing ones. You can also agree the standards to be achieved, within clear and reasonable timescales.

Provide your employee with appropriate support to improve their performance, allowing them a sufficient and reasonable period to make progress and carefully monitor this.

Step 7: Follow-up meeting

At the end of the agreed review period, arrange a formal follow-up meeting to discuss your employee’s progress and repeat the procedure from Step 3 if necessary. Up to three performance review meetings should be held before dismissal is considered.

If your employee’s performance reaches a satisfactory standard within the review period and no further action is necessary, inform your employee in writing. If this is not the case then agree a further performance improvement plan and set a further period in which your employee must improve.

Finally, with any incidence of poor performance it is crucial that you follow the Acas Code of Practice on discipline and grievance and ensure that employees are treated fairly and consistently.

Deal with issues of poor performance as soon as you notice them and you’ll find it much easier to work them out, to get the best results for your employees and your business.

If you missed the first two parts of this process here, click here for Part One and click here for Part Two.

Are Your Staff Still Legal? Employment Law Update

Employment law is updated regularly. To keep you up to speed and on the right side of the law, I?m running a workshop in Reading on 20 November 2013. Click here to book your place for just £10 +VAT.

In the meantime, here is a quick summary of some of the more recent updates that you need to know about, that have been made since the update blog I wrote in July 2013.

Employment tribunal fees introduced. Fees are now charged for issuing and hearing tribunal claims and for various applications made during tribunal proceedings. Fees were introduced on 29 July 2013 in respect of claims issued on or after that date. Claims already before the tribunal at that date are unaffected. Click here to read a leaflet that tells you more about the exact charges.

New employment tribunal rules in force. The new rules are intended to simplify and streamline the tribunal process and to cut costs. They came into force on 29 July 2013 and apply to all claims irrespective of when they were issued.

Settlement agreements. Also from 29 July 2013, the Government’s proposals for facilitating the use of settlement agreements came into force. As an employer you can now offer a settlement agreement at any time, irrespective of whether there is an existing dispute. Neither you nor your employee can later refer to the fact that an agreement has been offered in subsequent unfair dismissal proceedings, should an agreement not be reached.

Compensatory award cap. A cap on the compensatory award of one year’s pay has been introduced.  The previous statutory maximum will apply, if lower. The new cap applies where the effective date of termination is on or after 29 July 2013.

Employee shareholder contracts. Since September 2013 you are able to offer employee shareholder contracts to new and existing staff, although existing staff cannot be forced to agree. Under these contracts, employee shareholders must be given free shares worth at least £2,000. Shares issued up to £50,000 in value will qualify for capital gains tax relief. In return, employee shareholders are required to give up their rights to claim unfair dismissal, a redundancy payment and to request flexible working and time off for training.

National minimum wage increases. The national minimum wage increased on 1 October 2013. Click here to see all the numbers and how they’ve changed.

And as if that’s not enough, there are more changes coming in April 2014! Some will affect maternity and paternity leave, so come to my next workshop to find out more.

How to Sack Someone

No matter how hard you work at recruiting the best staff and keeping them engaged with their work and your business, at some point you may have to sack a member of your staff. Here’s a simple overview of the different (legal!) ways in which you can do this.

Dismissal is when you end an employee’s contract. When dismissing staff, you must do it fairly. There are different types of dismissal:

  1. Fair dismissal
  2. Unfair dismissal
  3. Constructive dismissal
  4. Wrongful dismissal

Fair and Unfair Dismissal

A dismissal is fair or unfair depending on:

  • Your reason for it, which must be valid. Reasons can include capability, conduct, redundancy or something that prevents staff from legally being able to do their job, such as a driver losing their driving licence
  • How you act during the dismissal process. Even if you have a fair reason, the dismissal is only fair if you also act reasonably during the dismissal and disciplinary process.

Constructive Dismissal

This is when an employee resigns because you’ve breached their employment contract. This could be a single serious event or a series of less serious events.

An employee could claim constructive dismissal if you:

  • Cut their wages without agreement
  • Unlawfully demote them
  • Allow them to be harassed, bullied or discriminated against
  • Unfairly increase their workload
  • Change the location of their workplace at short notice
  • Make them work in dangerous conditions

A constructive dismissal isn’t necessarily unfair – but it would be difficult for you to show that a breach of contract was fair.

Wrongful Dismissal

This is where you break the terms of an employee’s contract in the dismissal process, e.g. dismissing someone without giving them proper notice. Wrongful dismissal isn?t the same as unfair dismissal.

If an employee thinks you’ve dismissed them unfairly, constructively or wrongfully, they might take you to an employment tribunal.

How to Sack Someone

When it comes to actually dismissing a member of staff, your procedure should follow the advice set out in the Acas (Advisory, Conciliation and Arbitration Service) code of practice.

This is just an overview of the legal ways in which you can ask a member of staff to leave your business. There is more information online and if you’re having any staff issues, please do get in touch with me, to talk through your issues, before you make any decisions. You can always call me on 0118 940 3032 with your questions.