Recent Trend in Employer’s Encouraging Resignations by Implementing Performance Improvement Plans in the Tech Industry

By Andy Walsh, Solicitor

KOD Lyons Employment Team has seen a marked increase in employees requesting advice and assistance regarding the improper use of performance improvement plans (PIP).

Over the last fortnight several employees working in tech multi-nationals have contacted our Team in circumstances where their employers have offered severance packages whilst also suggesting that a PIP will likely follow if the severance package is not accepted. 

Sec 6 of the Unfair Dismissal Act 1977-2015 (the Act) states at subsection (1):

“Subject to the provisions of this section, the dismissal of an employee shall be deemed, for the purposes of this Act, to be an unfair dismissal unless, having regard to all the circumstances, there were substantial grounds justifying the dismissal.”

This places the obligation on the employer to establish that any decision to dismiss an employee is both substantively and procedurally fair. Should concerns arise in respect of an employee’s performance employers will very often impose a PIP which ought to set out in clear terms the expected performance associated with the employee’s role.

 This document should accord with the employee’s duties and specify in clear terms targets and objectives which are reasonable and have been discussed with the employee. Regular meetings should be scheduled to provide feedback during the period of the PIP. 

 Employers should also ensure to provide additional training as required to support the employee through the process. 

Should the underperformance persist at the end of the PIP process the employer will often seek to justify a decision to dismiss on performance grounds on the basis that the PIP process did not conclude satisfactorily.

The employer will likely seek to rely on clear demonstrable and objective examples of underperformance measured against fair and reasonable performance expectations to satisfy their obligations under Section 6 of the Act.

In relation to the recent queries raised with the KOD Lyons Employment Team, the relevant employees’ performance has been exemplary and subject to recent commendation by the relevant employers. In several instances, the employees received unexpected communication from their line manager regarding the potential imposition of a PIP whilst simultaneously receiving an offer from the company’s HR department regarding a severance agreement. 

Employers are reminded that the PIP process ought to be implemented with a view to ensuring  fairness and objectivity in relation to any alleged underperformance and ought not be used as a means to encourage or coerce employees to accept severance packages. 

Following robust correspondence, KOD Lyons Employment Team has secured the discontinuation of PIPs for employees and enhanced severance agreements for other employees who wished to move on.