Termination of Employment by Non-Performance

• The Employer’s Secret Tool for both Downsizing and Incentive for Standard Setting

Many employers find it difficult to terminate their underperforming employees. Some employers are concerned about potential lawsuits from a terminated employee. Others, give their employees several chances in order to say to themselves that the termination is justified. Some employers are just too nice.

Breakthrough Attorneys offers an interesting perspective to employers on termination process. It should be noted that when an employee doesn’t measure up to the standards set for the job, the employer has the right to terminate the employee.

Breakthrough Attorneys understands that terminating an employee may be a necessary act but it has potential to be a frustrating legal ordeal. Termination can lead to legal claims based on a variety of potential allegations of wrongful termination. Mishandling termination of an employee without preparing the ground work could have severe consequences to your business.

However, terminating an underperforming employee may be the best move for your business. It may improve morale among better performers. It may rid the business of a cancerous fraction of underperforming workers.

In Tanzania labour matters are governed by the Employment and Labour Relations Act, No. 6 of 2004. Procedures for terminating an underperforming employee are stipulated in the legislation.

The employers are required to follow procedures provided for in the labour laws and the company (if any). The following is an outline of preliminaries to consider and how to go about it.

What to consider?

In Tanzania, the labour laws provide for the procedures of terminating an employee for underperforming.
The employer must consider the following before terminating such an employee:
I. Whether or not the employee failed to meet a performance standard?
II. Whether the employee was aware, or could reasonably be expected to have been aware of the required performance standards?
III. Whether the performance standard was reasonable?
IV. The reasons why the employee failed are reasonable?
V. Whether the employee was afforded a fair opportunity to meet the performance standards?

How to go about it?

Termination for underperformance, unlike other forms of terminations, begins from the time when the employee is hired. A good employer is required to give the employee clear instructions concerning the scope of their employment duties as well as how they are to conduct themselves on behalf of the employer. An employer can select a few best performing employee to be a standard for all employees to measure up to.

It is a fact that the employer has the managerial prerogative to set performance standards, however, the law requires the standards not be unreasonable. For instance, an employee should not expect his accounting assistant to advise him on tax legal issues.

Checkpoints towards Termination

• When the employee underperforms, the employer is required by law to investigate the reasons for the unsatisfactory performance. The supervisor or manager of the employee is required to make an inquiry as to why the employee underperformed. This can be done in an informal meeting.
• The employer is then required to give appropriate guidance, instructions or training to the employee. The employer may setup a performance improvement plan for the employee to see what change is required of him to improve.
• The employer will be required to give the employee a reasonable time to improve. Reasonable time in the eyes of law depends on the nature of the job, the extent of the poor performance, status of the employee, length of service and the employers past performance records.
• Where the employee continues to perform unsatisfactory, the employer is required to warn the employee through a letter. In the letter the employer must inform the employee that he may be terminated if there is no improvement.
• Prior to finalizing the decision to terminate. The employer must call a formal meeting with the employee. All the requirements of the formal meeting must comply with the standards set in the labour laws.

NOTE:

1. An opportunity to improve may be dispensed with incase the employee is a manager or a senior officer whose knowledge and experience qualifies him to judge whether he is meeting the standards set or not.
2. Another circumstance is where the degree of professional skill that is required is so high that the potential consequences of the smallest departure from that high standard are so serious that even an isolated instance of failure to meet that standard may justify termination.
3.  The employee is allowed to have representation for assistance. At the meeting the employer is required to outline reasons for action to be taken and allow the employee to defend himself or through a representative.

The employer shall consider the defense made, and if the employer does not accept it, he must explain why. The same must be communicated to the employee.

Unlike other forms of termination, poor performance is commonly mistaken with misconduct. It is purely caused by lack of understanding of the clear distinction that separates them.

Breakthrough Attorneys’ Labour experts attempt to highlight the said distinction in the table below

	MISCONDUCT	POOR PERFORMANCE
1.	This deals with behavior. The conduct of the employee in relation to company policy, rules and procedure.	This deals with ability to perform duties by the employee.
2.	This occurs when a rule is broken or some other unacceptable behavior happens. E.g. an employee stealing	This occurs when an employee fails to measure up to the standards of employment e.g. a delivery boy failing to deliver a package within the required time.
3.	Misconduct results in immediate and severe disciplinary action. Perhaps even dismissal.	Poor performance results into investigation, counseling, meetings, discussions and trainings before dismissal.

This form of termination should never be done hastily. In addition to training and clear job description, the employers are required to establish a standing policy in place of how employee should conduct themselves in terms of performance in the workplace. Moreover, the employer is required to provide the employee adequate time to improve and offer him the tools needed to improve.
According to the local legislation, mishandling the procedure amounts to unfair termination. The employer may be liable to pay the employee compensation and/or reinstate the employee. Therefore, it is vital for employers to seek accurate legal advice before embarking in this process of termination. Upon embarking in the procedure, it is wise to document every correspondence and meeting with the employee.

 

Disclaimer:

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Breakthrough Attorneys, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.