Facts
Six out of ten employees in a certain department at IBM were given a so-called collective improvement plan (PIP – Performance Improvement Plan). The content of these PIPs was largely the same, with the exception of the quotas, which differed per employee. One of these employees went through two such improvement programmes, but according to IBM, his performance remained below par. The employer therefore requested the subdistrict court to terminate the employment contract on the grounds of poor performance pursuant to Section 7:669(3)(d) of the Dutch Civil Code.
Defence of the employee
The employee argued that the PIP was contrary to Dutch employment law because it was not tailored to him personally and consisted solely of targets, without additional guidance or concrete instructions. In his view, the improvement plan therefore did not meet the legal requirements.
Assessment by the subdistrict court
The subdistrict court ruled that, in principle, an improvement plan must indeed be tailored to the individual situation of the employee. However, this does not mean that such a plan must be completely customised. A collective approach may be permissible, provided that the core of the plan is relevant to all employees concerned and that there are also sufficient individual elements. In this case, the quotas per employee were set differently, which, according to the subdistrict court, provided sufficient individual tailoring.
Where things went wrong was in the implementation of the improvement programme. IBM could have been expected to announce and discuss the PIP with the employee in a meeting, to evaluate progress regularly with the employee and to record these evaluations in a verifiable manner. IBM failed to meet any of these requirements.
According to the subdistrict court, this is particularly reprehensible because the first PIP explicitly promised that interim evaluations would take place regularly and would be recorded. The fact that meetings did take place between the manager and the employee does not alter this, as the parties disagree on what exactly was discussed in those meetings. The district court also ruled that IBM's unilateral written evaluation was not a sufficiently objective and verifiable record.
The subdistrict court considered this omission to be seriously culpable.
Outcome
Although the subdistrict court considered the poor performance to be sufficiently plausible and the employment contract was terminated, the inadequate implementation of the improvement plan led the subdistrict court to find IBM guilty of seriously culpable conduct.
As a result, the employee was awarded a fair compensation of €10,000 in addition to the transition payment.
Amsterdam District Court, 10 June 2025: https://uitspraken.rechtspraak.nl/details?id=ECLI:NL:RBAMS:2025:3961
Importance of the judgment for legal practice
This ruling shows that an improvement plan does not have to be designed entirely on an individual basis; a collective approach may be permissible, provided that personal elements are also included, such as individual quotas. However, it is at least as important that the plan is implemented with due care. It must be discussed with the employee in advance, progress must be evaluated regularly and jointly, and the agreements and results must be recorded in a verifiable manner. If this does not happen – and certainly if it is also contrary to previous commitments made by the employer – the court may rule that there has been serious culpable conduct, resulting in fair compensation.
Advice?
The employment lawyers at SPEE advocaten & mediation have extensive experience in both drawing up and supervising improvement plans and conducting proceedings concerning poor performance and dismissal. We advise employers on a legally sound and practically feasible approach and assist employees who are faced with an improvement plan or termination of their employment. Do you have any questions about poor performance, improvement plans or dismissal? Please feel free to contact us.