Mr Jones has worked in the car industry as a Senior Sales Executive for eight years. Each year, he is set sales targets and the past two years they have increased. In the past Mr Jones has always hit his targets and has performed exceptionally. This year, however, there has been an economic downturn in business, and he is unable to meet his targets. He is called into a meeting and informed that he will be put under a performance improvement plan (PIP) and could be dismissed unless he meets his targets.
The company feels there is no reason for Mr. Jones not to hit his targets this year and take advice. They then make him fully aware of the problem and place him on a PIP with reasonable targets. They do everything they can to help Mr. Jones improve his performance. They carry out a proper investigation into the problem and set reasonable targets giving him nine months to improve. They provide him with support and his performance is reviewed regularly. At the end of the period, it is felt his performance has not substantially improved, and a meeting is held to decide whether he should remain with the company. Following the meeting, there is a genuinely-held belief in his incompetence, and he is dismissed. He is given the opportunity to appeal but his appeal is not upheld. Mr. Jones doesn’t take legal advice but lodges a claim to the employment tribunal within three months of his dismissal. The claim goes to a final hearing and the tribunal unanimously dismiss Mr. Jones’ case: they find the dismissal was fair as it fell within the reasonable band of responses of a reasonable employer.
Mr. Jones felt his employer effectively gave him an ultimatum: meet impossible targets or be placed under a PIP, ultimately leading to dismissal. After an exchange of correspondence, Mr. Jones resigns and brings a claim for constructive dismissal. The tribunal considers the evidence and finds that Mr Jones was given an unrealistic target and the company’s conduct was, without reasonable or proper cause, calculated or likely to destroy or seriously damage the relationship of trust and confidence between employer and employee. It finds there was therefore a breach of this implied term of mutual trust and confidence. Mr Jones’ claim for constructive and unfair dismissal is accepted and he is awarded compensation for loss of earnings.
Mr. Jones’ legal representatives write to his employers setting out the lengthy factual background to his current position and the law, including his potential claim for constructive dismissal and unfair dismissal if he is eventually dismissed. After around four weeks of correspondence back and forth an agreement is reached. His employer agrees to pay him a severance and, in return, he agrees not to take any legal action. The matter is concluded by a settlement agreement and his employer pays a contribution towards his legal costs.