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Does poor performance justify redundancy?

27th Apr 2016
Employee Engagement, Employment Law, Human Resources, Training

For an SME having just one member of staff who isn’t performing and is refusing to alter behaviour despite support, guidance and training, can have a major negative impact on all aspects of the business.

You can only invest so much time in requesting improvements and highlighting performance short-falls and you start to think that, ideally, you would like to cut your losses by making them redundant and recruiting a replacement. But is this legal?

What is “redundancy”?

The Employment Rights Act 1996 defines redundancy as being a dismissal of an employee which is wholly, or mainly, attributable to one of the following circumstances:

  • the employer’s business has closed down or will be closing down;
  • the particular workplace or site, where the employee is based is closing down; or
  • the requirement for employees to carry out work of a particular kind has ceased or diminished or is expected to cease or diminish.

This definition makes it clear that you cannot use redundancy as the reason for dismissing a poorly performing employee. Furthermore, if you recruited someone into the same or a similar role soon after, your real motive will be obvious and you could end up with an unfair dismissal claim. A high-risk solution which is ill advised.

Your options

An option is for our HR experts would support you to effectively manage the situation. This doesn’t mean that you can’t ever get rid of a poor performer – you just have to go through the correct processes.  Introduce an employee improvement plan (EIP). This is an informal yet structured framework that gives the employee a chance to improve to your satisfaction and avoid formal proceedings. It normally involves several stages including goal-setting, detailing exactly how you expect them to improve, by when and how you’ll measure progress. This process normally takes around four to six weeks which is usually enough time for an employee to show an improvement. Do not extend the time-frame for improvement under the EIP: this will undermine the whole process and give the impression the employee will always get one more chance.

No improvement

If the employee fails to improve to the required standard, the EIP will be solid evidence of the issues and how you tried to help the employee resolve them. Should this be the outcome, you can then trigger formal proceedings which will either be in the form of your disciplinary procedure (where the employee won’t do something) or your capability procedure (where the employee can’t do something).


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Our HR Tips

  • Ensure that you have the required policies and procedures in place
  • and that your management team have the suitable training and skills to be able to lead such a situation through to the desired outcome.

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