Advising Employer on Agreed Exit of an Under-Performing Employee

Our client was seeking advice in respect of two employees with performance issues. They wanted to understand what their options were moving forwards.

A meeting was arranged with the client to understand the background and their concerns with the employees, as well as a better understanding of how they wanted to deal with the matter moving forwards.

We advised on their options and the pros and cons of each. We noted in particular that performance concerns (capability) can be one of the five fair reasons to dismiss an employee, but that a fair process must also be followed. This typically involves going through a performance improvement plan (PIP) process, which can be lengthy and time-consuming.

An alternative to this process would be to hold a ‘without prejudice’ conversation, to allow the parties to openly discuss both positions and offer settlement terms for a mutually agreed exit.

The employer followed the advice accordingly and, subsequent to the meeting, we put together draft settlement terms and a corresponding offer letter to present to the employee. The settlement was successfully negotiated between the parties.

A mutually agreed settlement agreement was reached for the exit of the employee from the business.

Unfair dismissal claims can be costly, time-consuming and damage reputations. If you are considering dismissing an employee, it is very important to understand not only the fair reasons for doing so, but also the process you need to follow in order for it to be considered fair in all the circumstances.

Equally, it is important to understand what your options are as alternatives to going through these processes.