Warning due to poor performance: dos & don'ts

An employee does not always perform the work that they should be able to do or that the employer expects from them. It becomes problematic when work performance falls short of expectations over a longer period of time and may lead to disagreements within the team or even to economic disadvantages for the company. Then, at the latest, the question for HR is how to deal with this. What does the employer have to tolerate and what employment law measures should they take as early as possible? When is a warning due to poor performance acceptable and when can poor performance justify termination?

In this article, we answer these questions and explain what exactly is meant by a warning to an employee and what requirements must be met for a legally effective warning. We also explain what is important in the event of a warning due to poor performance (including tips on how to prepare such a warning) and which employment law measures are still available to the employer.

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What is a warning to an employee?

With a warning, the employer warns the employee because they have breached their contractual obligations. This may be the case, for example, if the employee:

• is repeatedly absent without good cause or without an notifying the employer
• regularly arrives late for work
• Does not report sick or does not report in time
• has a significant error rate over a longer period of time or performs inadequately
• violates company regulations (e.g. alcohol consumption at work)
• violates works agreements
• bullying and similar verbal misconduct

The warning is intended to remind the employee of his contractual obligations and to give him the opportunity to avoid such breaches of duty in the future. By signing the employment contract, the employee commits themselves to perform a specific job and to work under certain conditions. If they violate this agreement or specific contractual clauses of the employment contract, the employer can resort to a warning.

With a warning, however, the employer not only complains of the employee's conduct contrary to the contract (complainal function). It also expressly points out to the employee that they will no longer tolerate such misconduct or breaches of duty in the future (hinting function) and may resort to further measures, such as (behavioural) dismissal (warning function). In addition, the warning is also used by as documentation, as the employer must explain in the warning the specific facts as to why the employee has breached their duties.

The warning is not expressly regulated by law, but is recognized in current employment law practice and in the case law of the German labor courts. It's necessity results from the principle of proportionality. Accordingly, dismissal must always be the last resort that the employer resorts to. This simply means that before giving notice of dismissal, the employer must always check whether there are more lenient means available to them, for example, a warning or, if applicable, a transfer instead of a behavioral dismissal.

Requirements for an effective warning 

Even though the warning is not regulated by law in employment law, there are various requirements for the form and content of an effective warning from case law.

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Formal requirements for a warning 

In principle, the HR department or an authorized person can issue a warning to the employee both verbally and in writing. However, for the sake of of evidence, it is always recommended that the warning is issued in written form. Under certain circumstances, for example in a dismissal protection lawsuit, the employer must be able to prove that they have actually issued a warning to the employee in question.

In addition, the warning should be in a close temporal connection with the breach of duty or misconduct in question. This means that the employer should not wait too long before issuing a warning. If too much time elapses between the behavior complained of and the employer's response, the warning may be considered ineffective in the eyes of employment law. The employee may then be able to assume that his misconduct has no consequences under employment law. Even though the law does not specify any specific deadlines within which the warning must be issued, in the opinion of the Federal Labour Court (BAG), it should be issued as “promptly” as possible when the misconduct becomes known, as otherwise it may lose its warning function.

A warning becomes effective as soon as the employee legally receives it. For example, the employer can personally hand over the warning letter to the employee and have receipt confirmed in writing. An oral warning is therefore effective immediately if it meets the remaining requirements. However, in this case, the employer should document the warning and have it signed by the warned employee.

Good to know: It can be read again and again on the Internet that the employer must hear the employee about the facts before they can include the warning in the personnel file. In principle, he is not legally obliged to do so. However, it may be recommended, particularly if the employer wishes to continue the employment relationship with the employee concerned in the long term. Something else may result from collective agreements, which specifically regulate the warning. Then it may be necessary for the employee concerned to be heard for inclusion of the warning in the personnel file. This is the case, for example, with employment contracts to which the federal employee collective agreement (BAT) or the collective agreement for the public service of the federal states(TV-L) applies. If the employee is not heard accordingly, the warning is formally ineffective and the employee concerned has a right to have the warning removed from his personnel file. However, the warning issued does not lose its validity for subsequent (behavioural) termination if the content of the warning was issued for a comprehensible reason.

In contrast to a dismissal, the employer does not have to listen to or inform the works council — if one is elected in the company — before issuing the warning.

Content requirements for a warning 

For a warning to be legally valid, it must also meet certain requirements in terms of content.

• Description of the specific facts: In the warning, the employer must describe in detail the specific facts as a result of which the employee is said to have breached his employment contract obligations. Vague wording such as “the employee is often late” or general information such as “poor work performance” is not enough. Rather, the employer must state the exact breach of duty, including the exact date, time, and location so that the employee can understand which behavior led to the warning. The warning must also make it clear exactly which employment contract obligations the employee has violated as a result of his conduct.
• Request to refrain from doing this in the future: The employer must ask the employee to refrain from doing so in the future and to comply with his employment contract obligations.
• Threat of further employment law measures in case of repetition: In the warning, the employer must also expressly point out that they will no longer accept such breaches of duty in the future and that, in the event of repetition, further employment law consequences such as a dismissal may ensue. (keyword: warning function)

Important to know: If there is no threat of further employment law consequences in the event of a new breach of duty — i.e. the employee is not explicitly warned by the employer — a mere exhortation has occured. This also means that unless it is pointed out that a further breach of duty of this type is likely to result in dismissal, the employer cannot, in principle, terminate the employment relationship in the event of a repeated violation.

What is a warning due to poor performance and when is it justified?

In the event of a warning due to poor performance, the content of the employment contract an important role, as this usually includes content, scope, time and location of the work to be performed determines. It thus specifies the employer's expectations of the employee. The employee's main duty is to perform the contractually agreed work - for which they are paid by the employer. A warning due to poor performance is justified in particular if the employee falls short of the required work performance over a longer period of time and shows a lower level of performance or willingness to perform than colleagues in a comparable position, so that the employer can reasonably complain about the poor or reduced performance.

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Poor performance in employment law: Identifying signs of low performance 

In this context, low performers are workers, who perform work continuously, but remain below the average work performance of comparable employees over a longer period of time. Signs of poor or below-average work performance include many or serious errors (even after correction and assistance), a loss of performance over a longer period of time or remarkably slow or unmotivated work. The reasons for this can be manifold. If the employer therefore finds that an employee is showing below-average performance in the longer term, they should first try to find out why this is the case. This step is important in order to be able to derive possible employment law measures from it.

In employment law, a distinction is made between two groups of low-performers:

• Workers who are unable to perform better at work: the reason for poor performance lies in the person themselves, i.e. person-related. Possible reasons include illness or physical impairment, lack of or lack of suitability, and a changed working environment (e.g. due to the use of new technologies) in which the employee is no longer able to cope and is no longer able to deliver the corresponding work performance.
• Workers who could do better work but don't want to: he  work performance is due to the employee's behavior. The employee would be able to perform the expected work but is not prepared to do so or deliberately remains below his personal capacity, for example because they not motivated

This influences whether a warning due to poor performance is appropriate or not. Because in principle, the employer can only warn against deliberately controllable behavior.

According to the BAG, the employees are initially only required to perform the work that they owe to the employer under an employment contract — but not a specific level of success. In doing so, the employee must make appropriate use of his individual ability. This means that they must perform their work as well as they are able to in accordance with their mental and physical prowess, and must not consciously withhold effort. Otherwise, this could already be an indication that the employee is allegably breaching his employment contract obligations and may be regarded as a refusal to work.

However, since employment law does not precisely define when an employee performs inadequate work, it is up to the employer to assess whether there is poor performance or reduced performance from a legal point of view — and there are some legal stumbling blocks lurking here. According to the case law of the BAG, an employee can be classified as a low-performer or speak of significantly below-average work performance if they In the longer term, on average, perform less than 66 percent of the average work performance of comparable colleagues. The Cologne Regional Labor Court (Cologne LAG) also came to a similar conclusion in a recent judgment on ordinary dismissal due to poor performance (judgement of 3.5.2022, ref.: 4 Sa 548/21).

What options does HR have to assess poor performance? 

Before warning or terminating a low-performer, the employer should ensure that the employee is aware of what is expected of them and what specific obligations arise for them from the employment contract. If the employment contract does not contain any more detailed information on the scope and quality of the work to be provided, what matters, among other things, is what specific tasks the employer gives the employee - management right of the employer - and what performance the employee is capable of.

In addition, the employer needs a basis for comparison, on the basis of which they can determine to what extent the work performance of the employee concerned differs qualitatively or quantitatively from the average performance of comparable employees. For this purpose, the employer should record and log work performance and performance deficiencies over a longer period of time, for example with the help of software and compare with the performance of the respective team or department. In this way, even in the event of a dispute before the labor court, the employer can clearly prove what specific mistakes or performance deficiencies the employee concerned made in a specific period of time.

How do I write a warning due to poor performance?

As already mentioned above, a warning from the employer must overcome various hurdles in order to be legally effective. Since they may also be prerequisite for effective termination due to poor performance, the labor courts have specific requirements on a warning due to poor performance. It should therefore be formulated clearly, precisely and truthfully. In concrete terms, this means:

• The employer must describe poor performance in detail and precisely and therefore specify the exact date, time, and location. For example, on the basis of work performance protocols, the employer can identify specific situations in which the employee has repeatedly made mistakes or performed below-average work. If there are witnesses to the conduct contrary to the contract, they can be named to further substantiate the facts.
• If there have already been discussions or reminders due to the employee's faulty or inadequate performance, reference may also be made to this in the warning.
• If the employer has described the allegation, it should be as detailed as possible and address the breach of employment contract obligations. In other words, identify which obligations under the employment contract the employee has breached in a specific case. In doing so, the employer can refer to the wording in the employment or collective agreement to clarify the expected work performance.
• He should then ask the employee to refrain from misconduct in the future and perform their work in accordance with employment contract obligations.
• Lastly, they should present the possible consequences, such as behavioral dism f the employee ot perform better at work despite a warning.

Warning due to poor performance: Sample for employers and HR managers

If you have difficulty wording or are unsure how to formulate a warning in such a way that it meets employment law requirements, you are welcome to contact the twinwin team. For example, you are in twinwin template pool numerous legally secure documents are available on demand, including a Template for warnings. The explanatory comment will help you adapt the template to your warning due to poor performance and the specific requirements of your company.

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Alternatives to a warning due to poor performance from an employer's perspective 

For the employer or HR department, there is always the question: how do I react appropriately if an employee falls far short of the agreed work performance? As already mentioned, before issuing a warning due to poor performance, it is important to first get an idea of the situation that could have triggered the poor work performance of the affected employee. This is important simply because poor performance is not always solely the fault of the employee. For example, incorrect or inaccurate instructions, a poor working environment or an excessive workload can also be reflected in performance. Before employers or HR managers issue a warning due to poor performance, they should therefore take advantage of other employment law measures.

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Seek a conversation with the employee 

First and foremost, the employer should seek clarification with the employee in question and make them aware of the problem. This conversation should make it clear what is expected of the employee and what the actual performance looks like. It is also advisable to ask the worker why they think they are struggling and offer them assistance. If not necessary, unpleasant employment law sanctions can be avoided, as a conversation gives both sides the opportunity to clearly communicate their point of view and expectations.

It can also be useful to make target agreements with the employee with specific work and time requirements. This makes it more transparent which exact performance obligations exist on the part of the employee and whether these will also be met in the future. For reasons of transparency, it is also advisable to record the content of the personnel interview in detail and to record the target agreements in writing. Follow-up meetings can then be held to check whether the agreements have been met.

Start with an admonition 

An admonishment or reminder is a more lenient means than a warning. It serves to draw the employee's attention to his poor work performance, but without the legal consequences of a warning. With an admonishment due to poor performance, the employer makes it clear to the employee that their performance does not meet expectations and that they are expected to change this in the future.

The admonishment to the employee can be sent orally or in writing. For reasons of proof, it is generally advisable to issue the  admonishment in writing or to document the discussion with the employee accordingly.

Train or transfer workers 

If the poor performance is due to the employee concerned being overwhelmed at the workplace or with the work tasks assigned to them, the employer may consider appropriate training measures or a transfer to a performance-based job.

Appropriate training measures, such as on-the-job training, can help the affected employee to acquire missing knowledge and, if necessary, catch up with colleagues in comparable positions and thus increase work performance.

In the event of a transfer, however, the employer must consider whether a specific job has been agreed in the employment contract with the employee concerned. If this is the case, the transfer to a performance-related job can only take place through an (amicable) amendment agreement or notice of change

Once again: should a warning still be issued despite various employment law measures, the employer must state very precisely why they are warning the employee.

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When should HR consider dismissal due to poor performance? 

For the employer, dismissal due to poor performance must always be the last resort. This means that if all employment law measures have failed and the employee's work performance remains unchanged, dismissal due to poor performance may be considered. If this is currently an issue in your company, you can download a free template for a letter of termination here, which meets the legal requirements and which you can customize individually.

In principle, a distinction must be made as to whether the poor performance is due to the person or the behavior of the employee. This determines whether the employer can give personal or behavioral dismissal.

In order for such a dismissal to hold in court, it must — if the dismissal protection act applies — meet a number of requirements

The employer must prove significantly below average work performance over a longer period of time, i.e several months , from the employee. In addition, they can only justify dismissal due to poor performance if they can prove a negative forecast. They must therefore be able to explain that they have taken the employment law measures available to them, such as conversation, (re) training, transfer and — in the event of behavioral dismissal — warning due to poor performance, but these have remained unsuccessful and are therefore not expected to improve work performance in the foreseeable future.

Before giving notice of dismissal, it must also be examined to what extent the employee's poor or reduced performance disrupts operations and has an economic impact on the company — such that continued employment is unacceptable for the employer. In addition, a balance of interests in which the employer balances his operational and economic interests in dismissing the employee against the employee's interest in keeping his job must be carried out.

Important: The effectiveness of a termination always depends on all circumstances of the individual case. Ineffective terminations expose the company to significant financial and legal risks. Individual legal advice is appropriate on a regular basis.

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The Gist:

• A warning serves as a premoniton to the employee in the event of a breach of its employment contract obligations and may result in dismissal in the event of repeated misconduct.
• In the case of poor performance, it is decisive whether they are due to personal or behavioral reasons, as in principle, only willfully controllable conduct can be warned against.
• The employer is not obliged to hear the employee before issuing a warning (exceptions may result from collective agreements); however, this may be advisable so as not to unnecessarily burden the employment relationship.
• There must be a significant reduction in performance, i.e. the affected employee must be at least one third below the average performance of comparable employees.
• The employee must make appropriate use of his personal capacity, i.e. to perform his work as well as they are able to do in accordance with their mental and physical abilities.
• The employer must be able to explain the poor or reduced performance in a comprehensible manner if they wishes to issue a legally valid warning or termination.
• Employers can counteract a warning due to poor performance with further employment law measures, for example with a clarifying or target agreement discussion, an admonishment, various (re) training measures or a transfer to a performance-based job.
• Insofar as the dismissal protection act applies, dismissal due to poor performance should only be considered if all other employment law measures have been unsuccessful and there is a negative future forecast.

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