Can We Terminate an Employee for Poor Performance? Seeking Guidance from Experienced HRs

Hello Seniors,

One of our employees' performance is not good; therefore, we are planning to terminate him. Could you please guide me on whether we can terminate him based on his lower performance?

Thank you & Regards

Has the employee been counseled as to reasons for shortfall in performance? Has some additional training been given? Have reasons for the shortfall by this employee been analyzed by his supervisor? Have prior warnings been given to him and documented?

Employee can be terminated for consistent poor performance, but due care has to be taken prior by training, counseling, warning, etc.

Have you discussed with this person the reasons for poor performance? He is in a senior designation and should be aware of job requirements.

Sir,

We have already discussed with the employee regarding his performance issue, however, his performance is not as good as required to manage the specific responsibility. Despite that, there has been no improvement in performance. We have also asked him to resign, but he is not ready to do so. Therefore, the only option left is termination. Kindly guide us on whether we can terminate him based on his lower performance. If yes, what procedure should we follow?

Thank you.

What is the quantifiable performance expected of him?

Has the performance required of him been communicated specifically?

Issue a show-cause notice documenting specific failures and ask him for an explanation. Following his explanation, suitable action as warranted can be taken.

Hi,

Is it mandatory to issue a show-cause notice? This issue has been verbally discussed with him many times but there has been no improvement so far. As he is not able to work according to our company's requirements, we have finally decided to terminate him. Please guide me on what legal procedures to follow to terminate him. Whether we have to issue him a show-cause notice first or if we can directly issue him a termination letter.

Thank you.

First, write to him and give him an opportunity to improve his performance. In spite of such instructions, if he is unable to perform below the prescribed limit, then you have to issue a charge sheet, conduct an enquiry, and then terminate him. Otherwise, the whole termination will become bad in law.

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Sir,

Opportunity has already been given to improve his performance despite that not any improvement yet. Therefore, we have decided to terminate him. Please tell me what is the legal procedure of termination.

Documentary Evidence for Performance Issues

Hope you have documentary evidence to prove that an opportunity was given to him to improve his performance, and after such an opportunity, he has failed to improve. Please note that in such cases, you have to prove that the quantum of improvement was less than that of other employees or the normal standard practice. For example, if all the other workers are producing 80-100 products per day, and the employee produces only 50 products, it can be said that the performance was below standard.

Legal Procedure for Termination

The legal procedure is to issue a charge sheet, hold a domestic inquiry, prove such charges in the inquiry, and thereafter, based on the inquiry reports and findings, take action (i.e., termination or whatever suits you best).

Sir,

Please tell me how to conduct a domestic inquiry and which documents should be included in the chargesheet.

Dear DeveshCH, your post does not reveal much for any advice; at least I cannot gather from your reply, "appointed on senior designation." You were asked to explain what the work, job, or responsibilities of that employee were, and what type of work—manual, clerical, supervisory, officer, operational, etc.—was given to him. Furthermore, what was expected from him by management and how he has performed are the basic questions.

Merely saying performance is not satisfactory does not help anybody. You will have to be specific in putting charges on the employee, and further, you must be able to justify or prove (very popular among HR Fraternity) those charges of slow performance. However, mind you, slow performance of an employee is not misconduct, but willful or intentional slowing down of performance is certainly a serious misconduct.

So, one should always be careful in leveling charges of slow performance against an employee.

Case Study: RAMESHA vs HCL

Study the case of RAMESHA vs HCL, the verdict given by the First Additional Labour Court Chennai. It is preferable to start with the Glaxo Laboratories case where the misconduct, specifically assaulting the supervisor while traveling in the company-owned bus, was held not valid. The Supreme Court, in no ambiguous terms, stated that the misconduct in Standing Orders is not illustrative but exhaustive. Therefore, inefficiency must be explicitly mentioned in misconduct or as a separate clause that attracts termination of employment, especially if one is found inefficient despite warnings and counseling, making termination inevitable.

It goes without saying that a charge sheet should be given, a reply obtained, and if the reply is found not satisfactory, an enquiry should be ordered and conducted. A fair opportunity must be given, and copies of proceedings and submitted documents should be provided. If the Enquiry Officer (E.O.) finds the employee guilty, a second show cause notice should be issued to explain why the employee should not be terminated. In the termination order, it should be stated that the employee had not provided fresh grounds to reconsider the proposed termination.

You cannot go ahead and terminate anyone in the organization. It's important to document everything. For termination itself, it is crucial to provide three written warnings to an employee. Alternatively, based on performance, the employee can be placed under a Performance Improvement Plan (PIP). If there is no improvement even after being on a PIP, then termination on poor performance grounds is an option.

If forced resignation is not effective, it is important to consider your actions carefully before proceeding, as they may create problems for you in the future.