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What you should know about performance plans, illness and employment disputes

When an employee has performance issues or long-term illness, this can lead to disputes in the workplace, or even termination of employment. Both employee and employer have certain rights and obligations, and what each party can do depends on the exact details of the situation. Expat employment law expert Godelijn Boonman shares key considerations.

When an employee is not performing well in their role, then an employer can take certain steps to address this. The employer may begin with an intervention such as a conversation about performance levels and what is needed for the employee to improve. However, the employer may choose instead to create a Performance Improvement Plan (PIP) for the employee. A PIP is a formal document and should be taken far more seriously than a discussion.

Once an employer implements a PIP on their employee, both employer and employee must fulfil their obligations in the process. Both parties are expected to try to remedy the situation before it reaches the point where termination of employment becomes justified.

The employer is obliged to try and help the employee improve their performance, for instance by providing the necessary assistance, supervision or training. The employer is also required to document the entire PIP process.

The employee is obliged to actively participate in their performance improvement process. The obligation is also on the employee to ensure that the employer is fulfilling their obligations in the process. If the employee adopts a passive attitude towards the planned performance improvement, refuses to cooperate in the process, or otherwise obstructs the implementation of their PIP, then the employer can hold this against them.

While a PIP can be used to help an employee succeed, it can also be used to build a case for demotion or dismissal. As such, it is a signal that your employment may be at risk.

But what happens if the poor performance of the employee occurs during long-term illness?

When the employee is declared sick

The moment that an employee is declared unable to work due to illness, whether physical or mental, their status becomes that of a sick employee – and both parties’ rights change. A company doctor (bedrijfarts) is the only person who can make this determination.

The employer is obliged to pay the sick employee’s salary during the first two years of illness, regardless of how much work the employee can perform (in other words: regardless of their performance).

The employer cannot implement a PIP on an employee who has already been declared sick.

Employers are also prohibited from dismissing a sick employee during the first two years of their illness on commercial grounds such as reorganisation. (Note that an employee – even a sick one – can always be fired on the spot if the strict criteria for summary dismissal are met.)

Under guidance from the company doctor, both the employer and the employee must work together to create a plan for reintegrating the employee into the organisation as they recover from their illness. This may entail the employee resuming their original duties, but if this is not possible, the employer may provide other “suitable work” for the employee to do instead.

If either party refuses to engage in discussions or to fulfil their obligations then this can lead to a dispute, or even become grounds for terminating the employment relationship.

A dispute arises

Sick or under-performing? Truly sick, or just sick of the dispute? Questions like these can lead to an employment dispute.

Illness, performance issues and disputes are separate topics, but they often go hand in hand, and for good reason.

If an employee’s performance is questioned while they are already declared sick, the employee may feel that the employer is working against their recovery. Likewise, if an employer informs an employee that they need to improve their performance and the employee responds by reporting sick, the employer may feel that the employee is working against their performance improvement.

In practice, performance issues, illness and especially disputes will often negatively affect the employment relationship.

If an employee calls in sick after a dispute has occurred, this is often qualified as inability to work due to situational inability. A company doctor can then assess if the employee’s inability to work is also due to sickness.

There are only two options

By the time the situation has escalated to a dispute, there are only two options left: you can solve it together or solve it apart.

Option 1 – Solve it together

If the employer and the employee can come to an agreement, for instance through mediation, on how to resolve the dispute and thereby improve the employment relationship to the point where it can continue, then the employment can be maintained.

Unfortunately, once the situation has escalated past a certain point, repairing the relationship is often not a practical or mutually acceptable solution.

Option 2 – Solve it apart

If the employer and the employee cannot agree on how to proceed together, then the employment relationship will need to be terminated so that they can part ways.

Due to the time and costs involved in dismissal via the courts/UWV, and because sick employees are protected from dismissal, the termination of employment frequently occurs by means of a settlement agreement. A settlement agreement is a written offer by your employer to give up your job and leave the company voluntarily in exchange for a certain set of conditions.

Learn more about settlement agreements in this feature by Legal Expat Desk: Settlement agreements – what you need to know

Don’t wait – get advice

If a problem develops at work, don’t wait to address it. Time alone rarely solves a dispute, and it can escalate fast. If you are uncertain of your rights, getting good advice at the beginning can help you to make better decisions.

If the situation reaches the point where a PIP is implemented, an employment dispute occurs, or you need to terminate an employment relationship, you would be wise to seek legal advice as soon as possible.

If you need help with an employment issue, the GMW team of English-speaking lawyers can advise you, help you understand your obligations, avoid pitfalls, and ensure that the agreements you are making cover all the essential topics.

Contact them using the easy online form or phone 070 361 5048 to start a conversation.

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