The second part of the Work & Security Act (Wet werk en zekerheid (WWZ)) will take effect on 1 July 2015. The law of dismissal will change significantly as a result. If the employee does not consent to termination, the employer will, in principle, have to resort as from that date to the Employee Insurance Agency (UWV) or subdistrict court, depending on the ground for the dismissal. For dismissals based on poor performance, the employer will have to apply to the subdistrict court. The new law of dismissal makes it all the more important to document poor performance.
Under current law it depends on all the circumstances of the case whether a subdistrict court judge will terminate the employment contract and, if so, what compensation the employee will receive in that respect. If the personnel file is too ‘thin’ to justify termination of the employment contract on the grounds of poor performance, the subdistrict court judge may nevertheless terminate the contract, for instance, if productive cooperation between the employer and employee is no longer realistic. The current subdistrict court formula, which includes an adjustment factor, enables the subdistrict court judge to adjust the severance payment upwards in order to compensate for the thin file. The adjustment factor works, in effect, as a kind of ‘lubricant’.
After 1 July 2015, such flexibility for the subdistrict court judge to rectify a poor performance file which is too thin with a higher severance payment will disappear. The new system sets out eight ‘reasonable grounds’ for terminating the employment contract. The subdistrict court judge must examine whether the specific situation fits into one or more of the eight ‘boxes’. Each ground for dismissal will separately be reviewed. Briefly put, ‘poor performance’ is one of these reasonable grounds. The Act explicitly mentions the fact that the employer must have given the employee timely notice of this and have given the employee sufficient opportunity to improve his/her performance. In addition, the Act states that the employee’s unfitness for the job may not be due to failure of the employer to make adequate efforts to train the employee and may not be due to the employee’s working conditions. If the file is too thin to furnish a reasonable ground for dismissal based on poor performance, the subdistrict court judge must deny the dismissal request, unless a different reasonable ground for termination is present.
In summary, documentation will become all the more important. A proper personnel file includes written reports on the following points:
• The criticism must be stated as specifically as possible, with the employee being made to understand the seriousness of the criticism and being able to respond. It must be explained to the employee how he/she should improve his/her performance and what the employer specifically expects from him/her.
• The employee must be offered a realistic period for improving his/her performance. The term of employment and the specific points to be improved will determine what period of time is deemed to be reasonable. The time period must be communicated to the employee, whereby it must be pointed out to the employee what the consequences will be (for instance, demotion or dismissal) if his/her performance does not sufficiently improve.
• The employee’s performance will be periodically evaluated during this period, e.g. every two weeks or, if the improvement plan is more long-term, every month.
• The employer must support/guide the employee in improving his/her performance, for example by offering a course or coaching.
• At the end of the improvement plan, the employee must be informed in a final evaluation whether his/her performance has improved.
Finally, the employment contract may be terminated after 1 July 2015 only if, in addition to the reasonable termination ground, reassignment of the employee, within a reasonable period, to another suitable position (with or without the help of training) is not reasonably possible. Thus, in addition to the aforementioned points, the employer must investigate whether reassignment within the organisation is possible (if appropriate, by means of training or retraining). Only if that is not the case will the subdistrict court judge grant the termination request.