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31 May 2023 Requirements for the improvement plan in case of unsatisfactory performance

Introduction
As employment lawyers, we frequently emphasise the importance of a proper improvement plan in case of unsatisfactory performance by an employee. This was recently demonstrated again in a case heard by the Court of Appeal in Den Bosch.

What were the facts?
The case involved an employee (born in 1980) who had been working at a supermarket as a sales/cashier since 1998. She worked 32 hours, earning €1,731.89 plus holiday pay. In June 2020, the performance of the employee was rated 'mediocre' by the department manager and this was explained. A month later, the employee was transferred to a supermarket in another location for business reasons. From 9 November 2020, the employee was subject to a 'Personal Improvement Plan' with three areas for improvement.

An interim evaluation took place on 17 December 2020 and the final evaluation was on 29 January 2021. According to the supervisor, the employee had not reached the required level. She was given another chance to show sustained improvement until March 2021. In a meeting on 8 March 2021, the employee was told that there was no improvement. She was then given one last chance. On 12 April 2021, the supervisor wrote in the meeting report that the employee had improved on two points, but not yet on the third point (speed and productivity). Employee was given another chance until 1 September to “perform normally like everyone else”. On 7 June 2021, performance was assessed as 'moderate' and no increment was awarded. However, reference was made to a new improvement plan, to be drawn up by the employee herself, with two interim evaluations and 1 September 2021 as the end date.

From 8 June to 17 December 2021, the employer kept a log of the employee's performance. Finally, on 20 December 2021, the employee was told that the employer wished to terminate the employment contract and she was offered a settlement agreement.

However, the employee felt that the improvement process was not adequate: there were no concrete, measurable goals and no active support from the employer in implementing the improvement plan. Her employer just let her 'swim'.

How did the subdistrict court judge rule?
The supermarket went to court to have the employment contract terminated on the basis of unsatisfactory performance. The subdistrict court agreed: the employer had made it sufficiently plausible that the employee did not have the required skills for the job. Employee would have had sufficient opportunity to improve her performance. The employment contract was dissolved as of 1 August 2022 and the employee received the transition payment.

What was the outcome on appeal?
The employee lodged an appeal. She claimed reinstatement of the employment contract as of 1 January 2023: there was no unsatisfactory performance, she had not been given sufficient opportunity to improve her performance and she could be reinstated in another suitable position, according to the employee.

The court - citing a Supreme Court ruling of 14 June 2019 on the improvement plan- ruled that in this case, the employer should have been expected to provide the employee with more help, support and guidance to improve her performance. Especially as more demanding requirements were placed on the employee after the supermarket was taken over, but those requirements were not clear. Moreover, the employee had to draw up her own improvement plan and the initiative was therefore placed in her hands. This is incompatible with the fact that she was characterised as a calm employee who avoids conflicts and is not a talker. Her assessments were satisfactory or good and she had been committed to her work for years. Under the improvement plan, after five months, the employee showed improvements in parts, in two out of three points.

In short: according to the court of appeal, the employment contract was wrongly dissolved by the subdistrict court. The employee was not given sufficient opportunity to improve her performance. The court also did not go along with the employer, who felt that there was also a disrupted working relationship (an independent ground for dissolution).

The employee would like her job back, but according to the court of appeal this is not a possibility, given the long time lapse since the suspension and the fact that the employee was not involved in the organisational changes (merger with another supermarket). As an alternative, the court of appeal awarded fair compensation. The court took into account the 'value' of the employment contract to the employee and the other circumstances of the case.

According to the court of appeal, the employment contract would have lasted another six months if a supplementary (and unsuccessful) improvement plan had been implemented. This leads to an estimate of €12,500 gross. The court considers this fair, also considering the personal circumstances of the employee, such as the fact that she is the breadwinner, that she does not yet have a new job and that she has a partner who is unable to work due to illness. The fact that she also received the statutory transition allowance is also taken into account.

Read the ruling here.

Conclusion
This judgment once again underlines the importance of a good improvement plan in case of unsatisfactory performance: concrete, measurable goals must be set and concrete help, support and guidance must be offered by the employer.

However, there is no such thing as thé perfect improvement plan: what can be expected from an employer depends on (among other things) the nature, content and level of the job, the education and experience of the employee, the nature and degree of the employee's unsuitability, the duration of the inadequate performance since the employee was informed about it, the duration of the employment, improvement plans from the past, the employee's commitment to improvement and the nature and size of the employer's company.

Questions about unsatisfactory performance, dissolution of employment contracts or other employment law issues? SPEE advocaten & mediation is happy to help both employers and employees on their way.

SPEE advocaten & mediation Maastricht

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