Termination of Employment Contract with Valid Reason Due to Poor Performance & Performance Criteria

TERMINATION OF EMPLOYMENT CONTRACT DUE TO POOR PERFORMANCE & PERFORMANCE CRITERIA

Poor performance is frequently encountered as an important factor for employers to terminate the employment contract for valid reasons. However, in order for this situation to be detected by the employer and to be claimed as a valid reason for termination, certain legal conditions must be fulfilled. In this study, the termination of the employment contract due to the employee’s poor performance, which is one of the grounds for termination for valid reason listed in Article 18 of the Labour Law No. 4857 (‘Labour Law’), is mentioned and the road map to be followed by the employer in terminations based on poor performance and the legal principles to be considered in this process are discussed.

Termination for Valid Reason

Within the scope of the Labour Law,‘termination of the employment contract based on performance’ is among the reasons for valid termination. Article 18 of the Labour Law states that in workplaces employing thirty or more employees, the employer who terminates the indefinite-term employment contract of an employee with at least six months of seniority must be based on a valid reason arising from the employee’s competence or the requirements of the workplace or business. Reasons such as the employee’s poor performance, continuous illness, indisciplinary behaviour or the decrease in the labour force requirement arising from the enterprise can be counted among the valid reasons.

Employee’s Poor Performance & Performance Evaluation Criteria

In the event that the employee experiences a decrease compared to his/her initial performance, it can be said that his/her performance has decreased. However, this alone does not constitute a sufficient ground for the termination of the employment contract with valid reason. According to the decisions of the Court of Cassation, in order to terminate the employment contract with just cause, it should also be taken into consideration that the poor performance should significantly adversely affect the interests of the enterprise.

In order to determine poor performance and to terminate the employment contract of the employee for this reason, firstly, an objective performance evaluation system should be established in the workplace and the correct implementation of this system should be ensured[1]. Notifying or announcing the performance standards in writing to the employees, conducting performance meetings at regular intervals within the framework of these standards and recording the meetings in writing are of great importance in order to base the termination on a valid reason. In addition, the employer must adopt an objective approach in determining the evaluation criteria. At this point, different criteria should not be applied among employees, and all employees should be treated equally by establishing certain standards[2]. Thus, it will be possible to concretely prove that the termination is based on poor performance.

However, performance evaluation criteria must be appropriate to the workplace and job description. For example, the evaluation criteria applied to employees working in the production area and the criteria for employees not working in the production area should be regulated differently. In addition, there are also differences in the employer’s ability to prove poor performance, and while poor performance can be proved more easily within the scope of the number of production and targets, it may be more difficult for the employer to prove it for workers who do not work in the production area[3]. In order to determine the poor performance, it is important to conduct periodic performance interviews with the employees and to record them in writing in order to base the termination on a valid reason. The fact that the employee’s performance is lower than that of the employees performing the equivalent work is a condition sought in the jurisprudence of the Court of Cassation and in the doctrine[4] . Therefore, as mentioned before, it will be easier to prove the poor performance of workers working in production areas than workers not working in production areas.

The Roadmap to be Followed by the Employer in Termination for Reasonable Cause Due to Poor Performance

1. In order for the employer to determine the employee’s poor performance, it is recommended that there should be an objective, scientific performance evaluation system in the workplace that is suitable for measuring the employee’s performance in real terms. It is important that the relevant system is compatible with the worker’s job and task and that these criteria are communicated to the workers in advance.
2. Another point to be considered by the employer is that the downward trend in the employee’s performance should not be incidental, but should be continuous.
3. At this point, the employer should support the employee to improve his/her performance by subjecting him/her to training for a reasonable period of time.
4. In the event that the employee’s performance is not improved despite this, this issue must be proved by the employer.
   
   • If there is a continuous decrease in the employee’s performance, the employer should inform the employee about this situation and the employee’s defence should be taken. (Although this situation is not included as an obligation within the scope of the Labour Law, it is stated in the doctrine and the decisions of the Court of Cassation that the employee should have been given a warning about his/her performance in advance [5] )
   • If the worker submits his/her defence to the employer within the specified period, an evaluation should be made according to the content of the defence. If the employee does not provide a defence at all or as required (in writing), it will be important to determine this situation with a report to be signed by witnesses in order to prove that the requirement to obtain a defence has been fulfilled.
5. After the defence of the employee is taken, if the poor performance continues, the employee should be notified of this situation and the employee should be informed that the employment contract will be terminated in case of continuation of the said situation.
6. After the notification, if the employee’s poor performance continues for a certain period of time in accordance with objective criteria and this poor performance cannot be eliminated in a short period of time, the employer may resort to termination for valid reasons in accordance with the principle of last resort[6].
7. In the event that the employer resorts to termination for valid reasons, the reason for termination must be clearly, clearly and precisely stated in the notification to the employee regarding the termination of the employment contract.

Consequences of Termination of Employment Contract by the Employer for Invalid Reason

If the above-mentioned procedures are not fulfilled by the employer, the termination may be deemed invalid and the following consequences may arise:

• The right of the employee to file a reinstatement lawsuit,
• If the reemployment case is concluded in favour of the employee, but the employee is not reinstated, the claim for job security compensation and severance pay,
• Worker’s claim for compensation for idle time.

[1] ‘(…) In addition, a workplace-specific Performance Evaluation System should be developed and implemented to evaluate the performance of employees. The limits accepted by the employer in terms of productivity and performance evaluation include the professional characteristics and working standards of the workers. A valid reason may arise in the event of falling below the limits specified here and if this low level is continuous. An employer stating that there should be a performance above these limits must prove that it provides appropriate training, workplace standards and performance-enhancing opportunities.(…) (Court of Cassation 22nd HD., E: 2015/ 12319, K: 2015 / 15935, 04.05.2015.)

[2] In order for the performance and productivity results of the employee to be the basis for a valid reason, objective criteria must be determined. Objectivity criterion should be applied as those who do the same job in that workplace should be subject to the same rules. (Court of Cassation 9th HD., E: 2007/ 33486 E, 2008/ 10632 K, 04.05.2015.)

[3] In performance evaluation, personal (subjective) evaluations should be avoided as much as possible. However, while it is easier to apply this rule in production-based activities where quantity can be easily measured, it is more difficult in jobs based on mental activity (such as lawyers, consultants), especially in the service sector. (Baysal, p.105.)

[4] Standards for productivity and performance should be workplace-specific, reasonable and realistic. It is an objectivity criterion that those who do the same job act according to the same rules.’ (Court of Cassation 22nd HD., E: 2015/ 12319, K: 2015 / 15935, 04.05.2015.)

[5] ‘…it was not warned that his performance was poor. It was not explained in what way the plaintiff’s performance was poor, what was expected of him in the following period, and what the expected work and personal development goals would be. According to these material facts, the termination carried out by the defendant employer is not based on valid reasons’ (Judg. 9th H.D., 18.03.2008, 2007/27584 E. , 2008/5327 K. (Sinerji), Süzek, p.560.)

[6] In order for the employment contract to be validly terminated due to the professional and physical inadequacy of the employee, the aforementioned inadequacies must be present at the time of termination and these inadequacies must be in a situation that cannot be eliminated in a short time and with the help of a trainer, psychologist, therapist, doctor, etc. (Judg. 22.HD 12.12.2011, 2011/4093 E. , 2011/7195 K.)