Employers in Bermuda and elsewhere have become leaner and (maybe) meaner following the financial crises that have befallen commerce and industry. They no longer turn a blind eye to unsatisfactory performance, substandard work product, or laziness.

Employers expect employees to perform to a standard worthy of the service of the employer. Employers also have an obligation to train and guide the employee, having regard to their qualifications and experience, to ensure that the employee is aware of his responsibilities and how he is getting on.

I have often been involved in cases for both employer and employee where termination has come completely out of the blue no warning, no discussion, no indication whatsoever that the axe was about to fall. When that happens, it is often the case that the employer has ignored the law and/or its own policies and procedures.

Under the Employment Act 2000 ("the Act"), an employer has an obligation to inform an employee of concerns about his performance. If the concerns are serious, the employee should be given a written warning clearly setting out the poor performance complained of as well as how the employee can put right the substandard performance. The employer must also specify that if there is no demonstrable improvement during six months following the date of the written warning, the employee will be terminated without notice and without the payment of any severance allowance.

During those six months, the employee must demonstrate that he is improving and the performance issues are behind him. However, the employee cannot just sit back and expect to have the full six months to improve. Doing so would invite further written warnings on performance, misconduct and, worse, termination.

There are steps that an employer can take before non-performance gets to the written warning stage. Many policies and procedures handbooks set out a progressive procedure for dealing with disciplinary issues, including an opportunity for the employee to appeal a decision. Grievance procedures assist an employee to challenge what he may believe is harsh or unnecessary treatment; failure to take advantage of these procedures does an employee no favours. An employer who ignores these procedures is also likely to end up in a difficult situation answering to the employee's lawyer, union rep or the Employment Tribunal.

Such situations can be avoided with proper communication between employer and employee regarding what is expected of each party during the employment relationship.

The starting point is the contract of employment setting out the job and its duties, and also addressing issues such as remuneration, benefits, vacation time, any restrictions on current and future employment and termination provisions, to name but a few. The contract may also refer the employee to the policies and procedures of the employer either as a general guide or as part of the contract between the parties.

The employer has an obligation to provide the employee with a statement of employment, which is effectively a précis of the employment agreement containing the statutory terms required by the Act, including any disciplinary and grievance procedures. An employee should sign the contract, acknowledge receipt of the statement of employment and ensure that he has read both documents.

The employment agreement normally provides for an annual salary review, including an appraisal of the employee's performance. To make the review effective, the employer and employee should keep track of significant events or conduct throughout the year. The appraisal process should be as detailed as it needs to be, which means proper preparation on both sides. Proper procedures provide both parties with the opportunity to resolve performance or conduct issues before they escalate.

Many employers or supervisors become friends with their employees. However, at appraisal time such friendships should be placed to one side and the matter dealt with in a business-like manner. Doing otherwise invites problems at a later date because employer and employee cannot be as direct as they may wish for fear of harming the friendship.

Sometimes, an employee knows that his performance is not what it should be, and yet does not attempt to improve his performance. In those circumstances, the employee should either leave his employment, or seek discussions with his employer to determine the reasons for the non-performance and to find out if the employer can assist either in putting together a performance improvement plan or reallocating the employee elsewhere in the organisation.

However, and I finish as I started, with the economic and employment climate there will be others who would wish to take the employee's place and who are available to start immediately.

Attorney E. Kelvin Hastings-Smith, FCIArb, is Counsel and Manager of the Litigation Practice Group at Appleby. A copy of Mr. Hastings-Smith's column can be obtained on the Appleby website at www.applebyglobal.com.

This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.