A performance improvement plan in Ireland is rarely what its name suggests. For the employee it is the moment the job is put at risk; for the employer it is the record that will later have to justify a capability dismissal under section 6(4) of the Unfair Dismissals Acts 1977-2015. The same is true of a demotion or a pay cut imposed without consent, and of the exit offer that so often arrives midway through. Each one is a document, a date and a decision that will be tested at the Workplace Relations Commission, and each is still open to influence while the process is running.
The Performance Improvement Plan in Ireland: The Road to a Capability Dismissal
Section 6(1) deems every dismissal unfair unless the employer shows substantial grounds justifying it, and section 6(4) lists the grounds that can do that. Poor performance is argued under the first of them: the capability, competence or qualifications of the employee for the work they were employed to do. What the employer must prove is that the employee genuinely could not do the job, that the standard expected was made clear, that a fair chance to reach it was given with real support, and that dismissal was a proportionate response to the shortfall. The performance improvement plan is the employer’s evidence on each of those points. A plan with measurable targets, a realistic period, the support that will be provided, regular written feedback and an express statement that the job is at risk is a plan the employer can later stand over. A plan with vague goals, a four-week horizon, no training and no interim review reads at the WRC as a decision already taken. The employee should treat the document with equal seriousness: respond in writing to each target, record every meeting, ask for the support promised and keep copies, because the case will be decided on paper. Our guide to dismissal for poor performance and PIPs works through a fair capability process stage by stage.
Fair Procedures Still Apply to a PIP Dismissal
A capability dismissal is a dismissal, and the Code of Practice on Grievance and Disciplinary Procedures (S.I. 146/2000) applies to it in full. The shortfall must be put to the employee in writing, there must be a hearing at which the employee can respond with a representative present, the decision must be proportionate to what was found, and there must be an appeal. The failure the WRC sees most often in performance cases is a process that ran backwards: the decision to remove the employee was made first, and the plan was built to document it. The signs are familiar — a plan introduced days after a grievance or a return from leave; targets nobody else in the team is held to; a manager who set the targets, assessed them and then chaired the dismissal hearing. Where the real reason is not capability at all, the employer cannot bring itself within section 6(4), and the dismissal is unfair whatever the plan says. The first letter after any performance dismissal should request the written statement of reasons under section 14(4), due within 14 days, because the employer is then fixed to the reason it gives.
Demotion Without Consent
A demotion is a change to the contract of employment, and a contract can be changed only by agreement. An employer that moves an employee to a lower grade, strips out responsibilities, removes a title or reorganises the role so that it is no longer the job contracted for, without the employee’s agreement, is in breach of contract. Whether it is a breach that ends the employment is the question that matters. Section 1 of the Unfair Dismissals Acts defines constructive dismissal as a resignation brought about by the employer’s conduct, and the first of its two tests is the contract test: was the breach so fundamental that it amounted to a repudiation of the contract. A demotion imposed as a sanction after a fair disciplinary process is one thing; a demotion imposed without any process, or as a way of making the employee leave, is another. The employee’s choices are to accept the change, to object in writing and keep working, or to resign and claim constructive dismissal. The last is the riskiest, because the burden is on the employee and the WRC expects the internal grievance procedure to have been exhausted first. Our constructive dismissal page sets out the two tests and the grievance-first rule.
Pay Cut Without Consent
Pay is the term of the contract least open to unilateral change. A reduction in salary, the removal of a contractual bonus or allowance, a cut in guaranteed hours or a move from salaried to hourly pay, each imposed without agreement, is a breach of contract, and a cut to pay is the clearest example of the repudiatory breach the contract test looks for. That does not mean the employee should resign. An employee who stays and works under protest keeps the job, the income and the claim; an employee who signs an amended contract, or accepts the reduced pay for months without objection, will be met with the argument that the variation was agreed by conduct. The sequence that protects the position is a written objection on the day the change is announced, a formal grievance under the employer’s own procedure, and advice before any resignation. Where the cut is presented as the alternative to redundancy, that is a separate question which our sister site at redundancysolicitors.ie covers. The guide to demotion or pay cut without consent works through the options in the order they should be taken.
Exit Offers Made During a PIP
Many performance processes end not in a dismissal but in a meeting at which the employee is offered a sum to leave. Two points about that meeting are decided by Irish law rather than by the employer’s HR template. First, Ireland has no equivalent of the UK protected conversation. Second, without prejudice privilege attaches only where a dispute already exists, so an offer made out of the blue in the middle of a performance process, before any grievance or claim, is not automatically off the record. An exit offer made during performance management can itself support a constructive dismissal claim, because it is evidence that the employer had decided the employment was ending whatever the plan said. None of that makes the offer a bad one. It means the offer should be read with the claim in mind: the figure is one term, the waiver of claims is the term that matters, and a settlement agreement should be reviewed before it is signed. Our sister site at settlementagreementsolicitor.ie does that work, and our guide to without prejudice exit conversations explains when a conversation is genuinely privileged and when it is not.
Dates, Documents and the Route
Whichever way the process ends, the same clock runs. A WRC complaint for unfair or constructive dismissal must be lodged within six months of the date of dismissal, extendable to twelve months only where reasonable cause prevented an earlier complaint (section 8(2)). Redress under section 7 is reinstatement, re-engagement or compensation for financial loss attributable to the dismissal, up to 104 weeks’ remuneration, with a ceiling of four weeks’ remuneration where there is no financial loss, and the employee must mitigate by seeking work. The documents that decide a performance case are the contract, the handbook, the plan itself, every review note and email about it, the grievance correspondence and any exit offer. Keep all of them from the first day of the plan. The Dismissal Claim Route Finder asks three questions and shows which claims fit a PIP, a demotion, a pay cut or an exit offer, and whether the deadline is close.
For Employers Running a Performance Process
We also defend claims for employers, never on both sides of the same dispute. The capability case is won or lost in the plan: measurable targets, a realistic period, documented support, written reviews and a clear statement of the consequence, followed by a hearing and an appeal independent of the manager who ran the plan. A change to pay or role should be agreed and recorded, not announced. Where the relationship can be saved, workplace mediation through workplacemediation.ie costs less than a dismissal or a public hearing.
On a PIP, Demoted or Offered an Exit?
Bring the plan, the contract and the offer. One consultation establishes what the employer must prove, what you should sign and what you should not, and the date any claim must be filed by.
Call 01 5827148