Dear Venkatalakshmi, At the outset, let me share some thoughts on the issue of termination of employment of an employee for performance-related reasons. Even in the U.S., the only major industrial power in the world that mostly maintains the doctrine of "Employment-at-Will" as a rule, the higher judiciary, at times, does not hesitate to strike down an order of summary dismissal of an employee by their employer simply on the feeble and subjective reason of underperformance, coupled with adherence to the notice clause of the contract of employment. It is very difficult, although not impossible, to predict what constitutes a valid dismissal of an underperforming employee for poor performance, as it is basically a subjective inference in the absence of certain explicit norms or reasons associated with performance appraisal. They can be as follows:
Specification of grounds of dismissal
The collective bargaining agreement or standing orders or service regulations should state that underperformance is an act of misconduct that would warrant the extreme punishment of dismissal.
Fair standards of evaluation
There should be fair and reasonable standards of evaluation appropriate to the nature, type, and difficulty of job functions.
Provision for appropriate support and assistance
Generally, the satisfactory accomplishment of many jobs or tasks in terms of quality and time delivery involves teamwork that may comprise sequential or simultaneous operations from different people. If the arrangement in place is loose and ineffective, indicative of the lack of support or assistance from the employer in this regard, then the dismissal of an employee on the grounds of poor performance would amount to scapegoatism and eventually render it illegal.
Avoidance of absolute standards of evaluation
If a prefixed number or percentage of employees is to be selected as poor performers based on an Absolute Standard Evaluation System (usually followed in the IT and ITES sector as an austerity measure during a phase of slump), it is unjustifiable.
Absence of multi-faceted evaluation
In order to eliminate or prevent the factor of subjectivity, the system should facilitate multiple reviewers to evaluate the performance of an employee.
Provision for evaluation results
There should be well-documented clear instructions for improvement based on every evaluation.
Proof of continuous poor performance
General poor performance of an employee on a single occasion that does not result in any catastrophe cannot be a sole reason for their dismissal. There should be continuous poor performance.
Opportunities for improvement of performance
There should be adequate provision for performance improvement, such as job retraining, relocation to another department, implementation of PIP, continuous monitoring, mentoring, and the like.
Consideration of precedent
Provision for Voluntary Separation
I understand that being mindful of all the above factors and only after realizing the difficulty in expelling the employee on the grounds of poor performance, your management insists on their resignation.