Employers often face the challenge of managing employee misconduct and poor performance, two distinct workplace issues requiring different approaches.
Mismanaging these situations can lead to tribunal claims for unfair dismissal, making it essential for HR professionals and business leaders to differentiate between them.
In this article, Nathan Andrews outlines how to distinguish between misconduct and poor performance, the correct procedures for handling each, and how to avoid legal pitfalls.
What are the key differences between Misconduct & Poor Performance?
Factor | Misconduct | Poor Performance
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Definition | Breach of company policies, rules, or standards of behaviour. | Failure to meet job performance expectations despite adequate training and support.
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Examples | Theft, bullying, harassment, insubordination, fraud, policy breaches. | Inability to meet sales targets, frequent errors, poor time management, lack of productivity.
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Intent | Usually deliberate or reckless behaviour. | Typically unintentional, due to lack of skills, ability, or motivation.
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Process to Follow | Disciplinary Procedure (ACAS guidelines).
| Performance Management Process (Capability procedure). |
Potential Outcomes
| Warnings, suspension, or dismissal for gross misconduct. | Performance improvement plan (PIP), re-training, redeployment, or dismissal.
|
How do I handle Employee Misconduct (The Disciplinary Process)
When dealing with misconduct, employers must follow a structured disciplinary process to ensure fairness and compliance with ACAS guidelines.
1. Conduct an Investigation
- Gather evidence – Review emails, CCTV footage, witness statements.
- Interview relevant parties – Speak to those involved to establish facts.
- Determine if disciplinary action is needed – If the misconduct is serious and there is evidence to support that there is a case to answer, proceed to a formal hearing.
You can read our step-by-step guide to conducting workplace investigations here.
2. Hold a Disciplinary Hearing
- Provide the employee with a written invitation, outlining the allegations.
- Allow the employee to be accompanied by a trade union rep or colleague.
- Present evidence and allow the employee to respond to allegations.
- Consider mitigating factors before deciding on any disciplinary action.
Read more about what a fair disciplinary procedure looks like here.
3. Issue a Fair Disciplinary Outcome
- No formal action, informal warning – For minor issues.
- Formal warning – If misconduct is serious but does not warrant dismissal.
- Final written warning – For repeated offences or first time but serious offences.
- Dismissal for gross misconduct – If the behaviour is severe (e.g., fraud, violence).
All decisions should be documented, and employees must be given the right to appeal.
How do I handle Poor Performance? (The Capability Process)
Poor performance is best addressed through performance management, focusing on support and development rather than punishment.
1. Identify the Performance Issue
- Conduct regular performance reviews to track progress.
- Use objective data, such as KPIs, quality metrics, or customer feedback.
- Discuss concerns informally first before initiating formal action.
2. Implement a Performance Improvement Plan (PIP)
- Set clear, measurable goals for improvement.
- Provide additional training or coaching if needed.
- Set realistic timeframes for the employee to improve (e.g., 4-8 weeks).
- Schedule regular check-ins to assess progress.
3. If No Improvement Occurs, Follow a Formal Capability Procedure
- Issue a formal warning if performance does not improve.
- Consider alternative roles if skill mismatches are evident.
- Dismissal may be an option if all reasonable support has been given and performance remains unsatisfactory.
Employers must document all steps to avoid claims of unfair dismissal.
What are the Legal Risks of Mismanaging Misconduct and Poor Performance?
Some of the legal risks your business can face when mismanaging misconduct or poor performance are:
If you treat poor performance as misconduct and dismiss an employee for these performance issues under a disciplinary process, it can lead to an unfair dismissal claim.
As an employer you must treat similar cases fairly and consistently to avoid discrimination claims. Therefore, skipping the investigation stage or failing to investigate misconduct properly can make dismissals unlawful.
Must also be given a reasonable opportunity to improve performance before dismissal. If you fail to provide training and support to an employee your business could be left open to an unfair dismissal claim.
What our specialists have to say
“Understanding the difference between misconduct and poor performance is crucial for managing employees fairly and lawfully.”
Nathan Andrews continues
“Employers should ensure that Misconduct is handled through a structured disciplinary process, Poor performance through capability procedures and support plans, whilst maintaining legal compliance to avoid tribunal risks”
You can read our previous article on how to conduct a Disciplinary Procedure here.
Employee management specialists
We offer HR case management support, disciplinary guidance and performance management advice to help businesses handle these challenges effectively.
If after reading this you think you need expert advice or just have some questions, contact us on 01202 499255 to ensure your HR processes align with best practices. We offer all new clients a free initial chat, which you can arrange by filling in the form at the top of this page.
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