The situation
Is an employee not performing well? As an employer, you may consider dismissal due to underperformance. However, this is not something you can do lightly.
If you do not follow the correct steps, the consequences can be serious.
In a recent case, the Court of Appeal in The Hague ruled that a dismissal for underperformance was invalid. The employer had to pay more than €26,000 in compensation.
In this edition, we explain how the dismissal process works and what you, as an employer, should pay attention to.
The legal issue
Dismissal due to underperformance is subject to strict legal rules. You must not only explain what is going wrong, but also show that you have acted carefully as an employer.
Underperformance exists when an employee does not meet reasonable expectations, for example in relation to:
- work speed
- quality of work
- development in the role
- cooperation with colleagues
However, this alone is not enough. You must inform the employee in time and give them a genuine opportunity to improve — usually through a performance improvement plan.
A proper improvement plan typically includes:
- a clear conversation about performance, with concrete examples
- attention to possible causes (such as unclear instructions, private circumstances, or illness)
- appropriate guidance, support, or training
- a concrete improvement plan (preferably SMART) with a reasonable timeframe
- clear communication that the plan is aimed at improvement
- written documentation and the opportunity for the employee to respond
- interim evaluations and written reports
- careful file-building, in line with privacy rules
If no improvement follows, a formal warning may be given and the plan may be extended or adjusted.
In practice, dismissals often fail because of insufficient documentation — not because underperformance did not exist, but because the process was not handled or recorded carefully enough.
Still no improvement? In principle, dismissal must then be requested through the subdistrict court. You must prove that:
- there is underperformance
- the employee was informed in time
- a real opportunity to improve was offered
- everything was properly documented
Please note: dismissal is generally not possible in special circumstances, such as illness or pregnancy, unless a legal exception applies.
Alternatives
If dismissal due to underperformance is not possible, other options may be available:
- termination by mutual agreement (settlement agreement)
- dismissal for business or economic reasons
- dismissal on another reasonable ground, such as a disrupted working relationship
What does this mean for you?
Dismissal due to underperformance only succeeds if you act carefully in advance.
This means: identifying issues early, communicating clearly, offering a serious improvement plan, and keeping a proper record.
If you fail to do so, there is a high risk that the dismissal will not hold — resulting in costs and legal risks.
A practical tip: set out clear rules within your organisation on how improvement plans are handled, for example in an employee handbook. This ensures consistency and limits risks.
Finally
Would you like to know which steps are legally sound in your specific situation?
Feel free to contact us without obligation. We are happy to think along with you about the right approach.
