It has been a lingering problem in Germany to terminate an employee based on an employee’s poor performance. German law sets forth that an employee must only provide work of an average kind and quality. Precisely what constitutes "average work" has understandably not been specifically defined by the Federal Labor Court. However, during the last couple of years the Federal Labor Court has opined on to what extent an employee’s substandard performance may justify a termination.
In its decision of december 11, 2003, the Federal Labor Court held that if an employee performs at only 40% to 50% of the performance of the other employees, this may justify a termination due to poor performance. This is the first time that the Federal Labor Court set forth specific criteria that would justify a termination based on the conduct or the employee’s personal characteristics. an employer may be able to terminate an employee if the employee’s actual performance is lower than the employee’s target performance taking into consideration the employer’s ability to instruct or influence the employee. If an employee’s performance is only 40% to 50% of the average performance of the other employees, then this may be grounds for termination based on the employee’s conduct unless that employee can demonstrate that the lower performance is as a result of the personal characteristics of the employee and he is working at the average level of a person with similar personal characteristics. If the employee fails to meet his performance standards, and he is not able to improve his performance to the average level of similar employees, then the employer may terminate that employee. It would be unreasonable to expect the employer to continue employing that employee if the employee cannot improve his performance.
Similarly, in a decision dated June 3, 2004, the Federal Labor Court approved the termination of an employee based on his personal characteristics because that employee—a member of the sales staff—had significantly lower sales figures than other members of the sale staff.
these two decisions will make it easier for employers to determine which employees are performing at an unsatisfactory level. The employer can then document this poor performance and compare it to the performance of the other employees. Employers should consider reviewing the employees’ performance on a regular basis and documenting it accordingly. If a particular employee performs poorly over a long time period, the employee will need to put the employee on notice several times regarding this poor performance and then—depending on the situation— may terminate the employee either for reasons of conduct or the employee’s personal characteristics.
to the delight of many employers, the Federal Labor Court has finally given some direction with respect to the termination of employees due to their poor performance.
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