We are regularly contacted by employees going through a performance improvement plan. This can be a difficult process for any employee and performance improvement plans (or PIP) are either used to improve performance or, used to push the person out of the business. There are generally two ways to face a PIP, (1) you go through the PIP and hope you pass or (2) you negotiate an exit.
The main risk of (1), going through the PIP, is you run the risk of being dismissed for poor performance. This can make it very difficult to get a new job. The main benefit of (2), negotiating an exit, is you can aim to leave on better terms, so with tax free compensation, a reference, and your reputation intact. A performance improvement plan is often a convenient segue for us to negotiate an exit.
The case study below is one example of many, where we have helped a client going through a PIP exit the business on much better terms than if they just resigned or eventually dismissed for performance. You may also be interested in – What Is A Performance Improvement Plan.
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Background – Performance Improvement Plan – JM
What we set out below is a real example of someone we worked with that was going through a PIP. In this situation, it is important to stay employed, seek advice, and act quickly.
This is exactly what JM did.
JM came to us when he was still employed and was recently placed on a performance improvement plan. JM did not agree with the reason for being placed on the PIP and reached out to us.
After taking some initial details with our Customer Service Team, JM was booked in for a free initial call with one of our lawyers.
After discussing the situation with JM, it was clear he felt the performance improvement plan was being used to push him out of the business. This is particularly relevant if you have at least 2-years service, as an abuse of this process can amount to Constructive Dismissal or any future termination of employment may have been an Unfair Dismissal.
When asked if he felt the PIP was being used to improve his performance or push him out of the business, he had a strong sense it was the latter. His employer was also deviating from their written capability procedure (used for performance improvement plans), and the objected were either subjective or impossible to meet (all of which are signs that the PIP is being used to push someone out of the business).
Our Instruction
Though initial conversations with JM, it was established that his preference was to leave the business. He was not happy there and he did not want to risk being dismissed at the end of the PIP. We explained our Exit with Compensation Package and he was particular interested in leaving the business with tax free compensation, a reference, and his reputation intact.
Before speaking to us, JM was thinking of just resigning, but we explained volunteering to be unemployed without an income was rarely a good idea and he would lose the opportunity to negotiate compensation now (very much needed so he could hold out for a great new job offer). JM thought he could simply pursue compensation at the Employment Tribunal, but when we explained how complicate and long (it can take years) this process was, he could see negotiating an exit was the best route.
The Negotiation
After reviewing the performance improvement plan and other key documents, we explained JM’s legal position and together, made a plan designed to get him out of the business on the best terms. We then wrote to JM’s employer on a without prejudice basis, setting out the relevant background and highlighted the legal issues with the performance improvement plan. We set out the legal issues that the employer had created for itself by misusing the PIP process and made them an alterative proposal to legal action (the exit terms that JM wanted).
After some rounds of negotiation the parties reached an agreement that we finalised via a settlement agreement. JM was able to exit the business with compensation, a reference and his reputation intact. He was able to leave a business where he was unhappy with financial security to pursue new opportunities.
Performance Improvement Plan – The Outcome
JM’s situation was another example of the importance of staying employed, seeking advice, and acting quickly.
Had JM done nothing, or simply resigned (what most people do) his outcome would have been very different.
We would like to thank JM for his 5-star review below and allowing us to publish his story.
“I am very impressed with the consultation that Toner legal gave me. Mr Toner was very knowledgeable and gave great options for my situation. It was obviously a stressful time for me, but Mr Toner was friendly and patient. He was very thorough in explaining things. Additionally, he is very fair with his time and I am very pleased with his work. I highly recommend him.” JM