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Dismissal of low performers – Unable or Unwilling?

Dismissal of low performers – Unable or Unwilling?

Does your German company have employees on an employment contract under German law who are not performing as you would like them to? Are you already looking for ways to get rid of them? It may be that you are dealing with a classic low performer, whose poor performance is reason enough for dismissal.

  1. What is a low performer?
    According to the Federal Labour Court (Bundesarbeitsgericht), an employee can be classed as a low performer if over an extended period he performs on average at less than 66% of the level of a comparable employee.
  2. How do I get rid of a low performer?
    If your company is subject to the German Protection against Dismissal Act (Kündigungsschutzgesetz), you can only lawfully terminate a low performer’s contract if one of the grounds for dismissal recognised by this Act exists, unless you have only recently appointed the employee and agreed a probationary period with him, during which you want to dismiss him.

    1. Probationary period
      If it becomes apparent within the first few months of an employment relationship that the newly recruited employee is a low performer, you should act fast if a probationary period has been agreed upon. This is because the Protection against Dismissal Act does not apply during the probationary period, meaning the dismissal does not have to be based on a ground recognised by the Act. In addition shorter notice periods often apply during the probationary period.
    2. Protection against dismissal
      If dismissal is not possible, or no longer possible during the probationary period, it must be based on a ground recognised by the Protection against Dismissal Act if that Act applies to your company.
      Such grounds are either conduct-related or personal.

      1. Dismissal on grounds of conduct
        Dismissal on grounds of conduct is possible if the employee has violated his legal obligations and because of this it is unreasonable to expect the employer to continue the employment relationship.
        A violation of a legal obligation, specifically the employment contract, has occurred if the employee is able but does not want to perform, meaning he is simply unwilling. In this case the employee performs poorly because he does not want to perform the work. He simply has no desire to do his job.
      2. Dismissal on personal grounds
        Dismissal on personal grounds is possible if, for personal reasons, the employee is no longer able to fulfil the employment contract, now or in the future.
        A personal reason exists if the employee simply cannot perform his work because he lacks the mental or physical capacity to do so, meaning he is unable. In this case the employee is perfectly willing to perform but because of a lack of capability he simply can’t.
  3. How do I prepare for the dismissal and what must I bear in mind?
    First of all, you need to consider whether the dismissal is to be based on conduct or personal reasons so you can prepare for it accordingly.
    Undoubtedly you are now wondering how you can know whether you should be preparing for a dismissal based on reasons of conduct or on personal grounds. Frequently it is unclear whether a low performer’s poor performance is based on unwillingness or inability.
    If this is the case our advice would be to base the preparations for the dismissal and dismissal itself on both grounds. This twofold approach also increases the pressure on the employee in dismissal proceedings.

    1. Preparing for dismissal on grounds of conduct
      If a low performer’s poor performance is due to him being fully able to perform but simply ‘not feeling like it’, you should first issue a warning. This warning will then be the basis for a subsequent dismissal on the grounds of conduct. Whether dismissing an employee or issuing a warning, care should be taken with the content, form and provability of delivery as both the dismissal and the warning may be challenged in court.
      If the warning does not bring about an improvement in the performance you need to document, in the most legally binding way possible, that the low performer culpably performed at less than two thirds of the expected level over an extended period. You should also be able to prove that a warning was issued that went unheeded and that the opportunity to redress the culpable poor performance was not taken.
    2. Preparing for dismissal on personal grounds
      If however a low performer’s poor performance is due to his lack of ability, you must prove above all that the performance was below expectations and that it is highly likely that the poor performance will continue in future. Furthermore, a less severe measure than dismissal must not be possible, such as a transfer to a different role.
    3. Proof of low performance
      Whether the dismissal is on grounds of conduct or on personal grounds, it is important to make sure that the documentation proves the employee is a low performer as defined by the Federal Labour Court jurisprudence, meaning an employee who over an extended period performs on average at less than 66% of the level of a comparable employee. Firstly, you must be able to provide the court in subsequent dismissal proceedings with examples of other employees whose performances can be compared with those of the low performer. Furthermore, it is essential to document that the low performer performs on average at less than 66% of the level of comparable employees.

Useful tip: For successful dismissal proceedings, you must meticulously prepare for the dismissal, with adequate documentation and the necessary warnings and ensure that the dismissal itself is legally effective.

  1. Are there any other alternatives aside from dismissal?
    Preparing for such a dismissal is often a long process and ensuing dismissal proceedings can become time-consuming and costly. It may be an option to offer the low performer a termination agreement in which you part ways amicably. Of course this is only possible if the low performer agrees to such an agreement.

We would be happy to advise you in more detail on the dismissal options as well as on other solutions and help you with the implementation thereof.

By Ann-Katrin Praus

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