{"id":12943,"date":"2026-10-24T19:49:58","date_gmt":"2026-10-24T11:49:58","guid":{"rendered":"https:\/\/fdlaw.com.tw\/?p=12943"},"modified":"2026-10-24T19:50:48","modified_gmt":"2026-10-24T11:50:48","slug":"employee-poor-performance-termination","status":"publish","type":"post","link":"https:\/\/fdlaw.com.tw\/en\/blog\/employee-poor-performance-termination\/","title":{"rendered":"Can an employee be dismissed for poor performance? How can a company prove incompetence and legally terminate their employment?"},"content":{"rendered":"

Legal content provided by:Lawyer Li Yusheng<\/a><\/p>\n

Can a company lay off an employee who is underperforming?<\/h2>\n

According to Article 11, Paragraph 5 of the Labor Standards Act, an employer may terminate the employment contract with advance notice if an employee is unable to perform their job duties. However, the employer cannot assume that the employee is automatically eligible for dismissal simply because the supervisor is dissatisfied, the employee's performance evaluation is poor, the performance does not meet the standards, or the performance is below expectations.<\/p>\n

The company should still provide objective evidence of work performance and incompetence, assess whether reasonable improvement measures have been taken, and whether termination is a last resort. The real questions that need to be answered are: were the job requirements reasonable, where exactly was the employee failing to perform, how did the company assist, and why there were no other reasonable and feasible ways to maintain the employment relationship.<\/p>\n

Before HR begins preparing severance documents, they should first examine the "facts of incompetence," "improvement and alternative measures," and "termination procedures and compensation" separately. Without a basis for the first two, even if notification is completed and severance pay is paid in full, termination may still be deemed invalid. This article focuses on performance and incompetence; for other routine management issues, please refer to other resources.General labor disputes and personnel document preparation<\/a>.<\/p>\n

Under Article 11, Paragraph 5 of the Labor Standards Act, what circumstances constitute incompetence in performing one's job duties?<\/h2>\n

Article 11, Paragraph 5 of the Labor Standards Act<\/a>The requirement is that employees are "incompetent in performing their duties," not that the company can arbitrarily dismiss lower-ranking employees. Judgment should be based on the objective and reasonable purpose of the job itself and the employment contract, rather than setting unattainable standards after the fact.<\/p>\n

Objective incompetence: the gap between ability and reasonable job requirements<\/h3>\n

For example, a lack of necessary professional skills, continued inability to complete reasonable work requirements even after appropriate guidance, or repeated errors that could affect core duties. The company should specify the work, requirements, results, and impact, and clarify whether the discrepancy stems from the employee themselves, unclear assignment, insufficient resources, or work allocation issues. A single mistake or short-term unfamiliarity with a new system should not be automatically considered a sign of incompetence without analysis.<\/p>\n

Subjective incompetence: having the ability but consistently failing to fulfill labor obligations.<\/h3>\n

Court practice also considers subjective work attitude, such as being able to do something but not doing it, long-term passive resistance, or refusing to fulfill reasonable work requirements without a legitimate reason. However, "poor attitude" is just a comment; the company still needs to explain when and what kind of work was assigned, whether the instructions were reasonable, how the employee responded, what impact it had on the work, and whether the work was still not fulfilled after improvements were made.<\/p>\n

The Supreme Court's Civil Judgment No. 2630 of 2007 incorporates objective capacity and subjective performance of labor into the judgment, and requires consideration of the last resort nature of improvement and dismissal.Taiwan High Court Judgment No. 195 of 2020 (Labor and Labor Division)<\/a>This viewpoint is also cited to specifically examine work ability, cooperation, and alternative measures. These judgments cannot be simplified to the manager having the right to dismiss an employee simply because they deem the employee difficult to work with.<\/p>\n

Can a score of only 60 be used as grounds for dismissal?<\/h2>\n

Performance reviews can be one form of evidence, but a score of 60, a single failing grade, or a supervisor's subjective evaluation will not automatically lead to dismissal. Even if job rules specify a score below a certain threshold for termination, the legal requirements of the Labor Standards Act must still be met, and internal regulations cannot reduce legal protection.<\/p>\n

Companies should verify whether the performance evaluation criteria were clearly defined in advance, whether employees were aware of the requirements, whether the projects corresponded to their actual positions, and whether each deduction was based on factual evidence. Long-term performance, consistency of ratings for the same position, the existence of unreasonable differential treatment, and whether opportunities for improvement were provided will all affect the credibility of the evidence.<\/p>\n

For example, regarding "poor report quality," the company should specify which reports to compare, what errors occurred, the notification for correction, and the subsequent results. Regarding "insufficient communication and cooperation," there should be assigned tasks and concrete responses, not just a supervisor's comment. An employee's refusal to sign the performance review form does not automatically mean the rating is valid or invalid. The company should retain the notification and any employee objections, responding to each reason. Refusal to accept the rating should not be automatically considered a serious disciplinary violation.<\/p>\n

How can a company prove an employee's incompetence if their performance falls short of expectations?<\/h2>\n

It should be proven that the employee has been consistently unable to meet reasonable work requirements, not just that the "performance rate was insufficient this month." Whether the KPIs were communicated in advance, whether the targets were reasonable, whether the company provided the necessary resources, whether market and departmental factors affected the results, and whether the standards for similar positions were consistent must all be examined.<\/p>\n

Sales personnel performance may be affected by customer allocation, region, product, price, supply, and market changes; supervisor performance must be differentiated between their controllable management matters and company decisions; general staff should be evaluated based on quality, deadlines, errors, and specific job requirements. Sales revenue targets cannot be directly applied to all positions.<\/p>\n

Job and Management Documents Examples<\/th>Factors that should be excluded or clarified<\/th><\/tr><\/thead>
Sales personnel:<\/strong>Pre-event objectives, customer configuration, visits and quotations, transaction process, and comparable performance in the same period.<\/td>Regional and customer group differences, product supply, pricing policies, market changes and resource allocation.<\/td><\/tr>
Department Head:<\/strong>Responsibilities, project milestones, staffing, budget authority, assignment and improvement tracking.<\/td>Company-wide ad hoc decisions, cross-departmental delays, unavailable budgets, or manpower constraints.<\/td><\/tr>
General staff:<\/strong>Work instructions, delivery and error records, guidance notices, correction results and quality requirements.<\/td>Unclear task assignments, unbalanced workloads, system malfunctions, insufficient training, and unreasonable deadlines.<\/td><\/tr><\/tbody><\/table><\/figure>\n

The above are general guidelines for data collection that companies can adopt, and are not specific to any particular case or fixed dismissal threshold. Performance comparisons should select truly comparable positions and periods, and retain both favorable and unfavorable data. Companies should not simply select the lowest-performing months or subsequently raise the threshold to support predetermined severance decisions.<\/p>\n

What is a Performance Improvement Program (PIP)? Is it mandatory for a company to implement one?<\/h2>\n

A Performance Improvement Plan (PIP) is a plan designed to specifically identify shortcomings, define measurable improvement goals, provide coaching resources, and track improvement results over a reasonable period. It should be a tool for actual management and improvement, not merely a document created after a pre-determined layoff.<\/p>\n

PIP is not a fixed procedure that is expressly required in all cases under Section 11, Paragraph 5 of the Labor Standards Act.<\/strong>The law does not require all companies to complete 30-day, 60-day, or 90-day PIPs. The improvement period should be determined based on job duties, work cycles, deficiencies, and the possibility of improvement; if there are more specific commitments in company contracts, work rules, or group agreements, these should also be reviewed and followed.<\/p>\n

In practice, a clear document should be used to list current shortcomings, expected results, assessment data, company-provided resources, follow-up timelines, and employee responses. For example, it is inappropriate to simply write "increase motivation," but rather to include reasonable deadlines, measurable results, and necessary collaboration. Once the plan begins, guidance must be provided truthfully, the process must be documented, and reasonable objections must be addressed. If assessment is impossible due to legitimate leave requests or insufficient company resources, arrangements should be reviewed, and it is inappropriate to directly record it as an improvement failure.<\/p>\n

Signing an employee's Performance Improvement Plan (PIP) does not equate to a prior admission of incompetence or a waiver of the right to contest termination. Even if the planned objectives are not met, the company must still examine the objectives themselves, provide practical guidance, and utilize other alternative methods. A "PIP failed" conclusion cannot replace all legal requirements.<\/p>\n

What is the principle of dismissal as a last resort?<\/h2>\n

Before terminating a contract, the employer should assess on a case-by-case basis whether there are still minor, reasonable, and expected ways to improve the situation, such as specific job instructions, appropriate training, adjustments to responsibilities and goals, or legally reasonable job reassignments. The company should be able to explain what has been done, the results, and the actual reasons for not adopting any alternative approach.<\/p>\n

The aforementioned High Court judgment No. 195 of 2020 (Labor Court) did not only consider whether employees were uncooperative with administration or scheduling, but also examined whether they had reached a level of incompetence and whether the employer had taken appropriate alternative measures. The practical significance for businesses is to preserve the complete management process, rather than simply adding up all negative events and declaring a complete breakdown of trust.<\/p>\n

This does not mean that every case must involve a fixed number of training sessions, warnings, transfers, or improvement plans. Company size, job nature, available resources, reasonable job openings, and the actual possibility of improvement are all relevant. Having a PIP does not guarantee its legality; conversely, the absence of the PIP designation in a document does not necessarily mean that no improvement opportunity was ever provided.<\/p>\n

If a job transfer is considered, the following conditions must be met:Article 10-1 of the Labor Standards Act<\/a>Employers must not violate contracts, must act out of business necessity and without improper intent, must not unkindly change wages or other working conditions, must be competent in their work, and must consider location assistance and the interests of the employee's family. Employers must not force employees to resign through unreasonable transfers, pay cuts, or deliberately assigning impossible tasks.<\/p>\n

Can a company dismiss an employee who refuses to improve or cooperate with management?<\/h2>\n

First, differentiate between insufficient ability, failure to perform despite being capable, reasonable disagreement with instructions, and serious breach of contract or work rules. An employee's statement that they cannot perform, disagree with the performance rating, or file a complaint does not necessarily constitute a refusal of reasonable work instructions; the company should first verify whether the assignment is legal, reasonable, falls within the scope of their responsibilities, and is feasible before judging the employee's reasons.<\/p>\n

Article 11, Paragraph 5 addresses situations where an employee is genuinely unable to perform their duties, generally involving notice and severance pay. Article 12, Paragraph 1, Item 4 requires that the violation of the employment contract or work rules be serious enough to warrant termination without notice, and there is a restriction that the termination can only be exercised within 30 days of becoming aware of the situation. Ordinary poor performance cannot be disguised as serious misconduct in order to save on notice pay or severance pay.<\/p>\n

The appropriate legal basis should be chosen for the same incident based on the specific conduct, duration, impact, and possibility of improvement; for a more comprehensive analysis of investigations and disciplinary actions\/dismissals, please refer to [reference needed].Investigation and dismissal of employees for serious misconduct, embezzlement, or breach of trust<\/a>.<\/p>\n

Should sick leave and family care leave be included in employee performance evaluations?<\/h2>\n

Legitimate leave requests should not be equated directly with absenteeism, refusal to work, or incompetence. This is in accordance with the current regulations in 2026.Article 9-1 of the Labor Leave Regulations<\/a>Unless otherwise stipulated in this rule or other laws, employers may not impose adverse disciplinary action on employees who take ordinary sick or injury leave for no more than ten days within a year. When an employee is subject to adverse disciplinary action due to sick leave, the employer bears the burden of proof that the disciplinary action is unrelated to the sick leave.<\/p>\n

Even if a sick or injury leave exceeds ten days, it is not a threshold for a company to directly deduct performance reviews or lay off employees. Employers must still comprehensively evaluate work ability, attitude, and actual performance, and cannot judge solely based on the number of sick days taken.Questions and Answers on the Amendment of the Law by the Ministry of Labor<\/a>It also explains that other leave that is protected by other laws and regulations and cannot be enforced is not included in the calculation of these ten days.<\/p>\n

Family care leave is also protected under Articles 20 and 21 of the Gender Equality in Employment Act. Employers may not treat it as absence due to a legally requested leave, thereby affecting full attendance bonuses, performance reviews, or imposing other adverse penalties. Other types of leave should be checked against applicable regulations separately; it is inappropriate to uniformly convert all types of leave into "poor attendance performance." Processing leave pay according to law and regulations is not the same as imposing adverse personnel penalties on leave as a reason.<\/p>\n

If the company claims that an employee has other independent performance issues, it should provide specific work data unrelated to the leave request and check whether the objectives and evaluation period reasonably reflect the legality of the leave request; a low score cannot be used to cover up dismissal due to leave. When occupational injury medical treatment, maternity leave, pregnancy, or other special protections are involved, termination restrictions must be checked separately, and Article 11, Paragraph 5 cannot be relied upon alone.<\/p>\n

What legal procedures should a company complete after deciding to lay off employees?<\/h2>\n

First, confirm the validity of the grounds for termination and whether there are any other restrictions on termination.<\/h3>\n

First, confirm the facts, evidence, and last resort regarding the employee's inability to perform their duties. Then, examine the employment contract, work rules, and special protection provisions. Not all personnel disputes are subject to the same severance notice; the reason for termination should be consistent with the facts at the time and allow the employee to identify the shortcomings the company is referring to and the basis for those claims.<\/p>\n

Second, complete the termination notice and appropriate advance notice.<\/h3>\n

according toArticle 16 of the Labor Standards Act<\/a>For those continuing to work for more than three months but less than one year, ten days' notice is required; for those working for more than one year but less than three years, twenty days' notice is required; and for those working for more than three years, thirty days' notice is required. While this clause does not specify the number of days' notice for those working for less than three months, it does not mean that there is no legal grounds for termination or exemption from severance pay; the contractual agreement must also be verified.<\/p>\n

If the required notice period is not provided as required by law, the employee shall be paid the wages for the shortfall. The notice shall clearly state the intention to terminate the employment, the reasons for termination, and the effective date, and evidence of service shall be preserved. If the employment relationship continues during the notice period, the employee shall be granted paid leave for other work hours, not exceeding two working days per week. Internal decisions or notifications to authorities cannot replace a formal termination notice to the employee.<\/p>\n

Third, severance pay is calculated based on applicable seniority.<\/h3>\n

The years of service applicable to the new labor retirement system are based on...Article 12 of the Labour Pensions Act<\/a>For each full year of service, half a month's average wage is awarded; for less than a full year, the amount is calculated proportionally, up to a maximum of six months' average wage. For those under the old system, according to Article 17 of the Labor Standards Act, each full year of service is awarded one month's average wage, and remaining years of service are handled according to the proportions and calculation rules for periods less than one month as stipulated in that article.<\/p>\n

For employees with a mix of old and new seniority records, the process should be segmented; the same formula cannot be applied to all employees. Average wages, seniority, and special agreements must all be verified; statutory severance pay should be paid within thirty days of contract termination. Paying severance pay is a legal obligation and does not automatically make a dismissal without legitimate grounds valid.<\/p>\n

Fourth, a separate severance notice will be issued.<\/h3>\n

Article 33 of the Employment Services Law<\/a>In principle, employees are required to submit a list of names to the local competent authority and public employment service agency ten days prior to departure; in cases of force majeure or other legally mandated circumstances, a three-day notification period is required from the date of departure. Employees who are dismissed according to law before completing ten days of employment will be dealt with accordingly.Official statement from the Ministry of Labor<\/a>The resignation notice should still be processed within three days of the resignation date; it does not mean that no notification is required.<\/p>\n

Giving advance notice to employees and notifying the organization are two different obligations. Paying advance notice wages cannot replace issuing a severance notice; completing the notification cannot replace issuing a termination notice or proving the legality of the grounds for dismissal.<\/p>\n

Fifth, settle all outstanding salaries and unused special leave, and provide relevant documentation.<\/h3>\n

Calculate and pay wages due, overtime pay, and unused special leave wages that are legally required to be settled, and process payments in accordance with applicable regulations. Handle service certificates, termination certificates, and insurance changes in accordance with the law, and the reasons stated in the documents must be consistent with the actual situation; wages due cannot be withheld on the grounds that the employee has not yet agreed to dismissal, signed an agreement, or waived the right to dispute.<\/p>\n

Sixth, preserve complete evidence of termination.<\/h3>\n

Organize the reasons for the incident, original performance data, improvement and alternative measures, employee feedback, termination notices and delivery, payment and notification receipts into a traceable timeline. Subsequent litigation examines the actual management process, not documents that were created retroactively to reflect the original situation.<\/p>\n

Can a company ask an employee to resign voluntarily in lieu of severance pay?<\/h2>\n

Forcing employees to sign voluntary resignation letters to circumvent severance procedures is not an option. The legal basis and effects of voluntary resignation, mutual termination, and unilateral severance by the employer are different and should faithfully reflect the actual intent, rather than being named in a way that the company hopes to reduce costs.<\/p>\n

A company can propose a mutually agreed termination plan, but it must be based on a genuine and free willingness to negotiate, and cannot use threats, false statements, or other improper means to force signing. The termination date, payment details and timeframe, handover procedures, and related rights and obligations should be clearly stipulated, and the employee should be given the opportunity to understand and consider them. If the company has already unilaterally terminated the contract, it cannot rely solely on a subsequent formal document to assume that the employee originally left voluntarily.<\/p>\n

If an employee does not accept the agreed-upon solution, the company should still revert to the assessment of the statutory termination criteria; the employee's refusal to leave should not be attributed to poor work attitude.<\/p>\n

What can an employee do if they refuse to accept layoffs and file a complaint or lawsuit with the labor bureau?<\/h2>\n

The company may face labor mediation, confirmation of the employment relationship, continued wage payment, and other claims for labor rights. The company should retain and systematically organize the assessment basis, actual performance, improvement notices, coaching content, employee responses, alternative measures, and termination notices; it cannot simply submit the last performance review form or severance payment slip.<\/p>\n

Upon receiving the notification, you should first identify the competent authority, procedures, and time limits, and check whether it involves an application for reinstatement or temporary pay. For related procedures and risks, please refer to [link\/reference needed].How a company responds to a labor mediation notice and labor litigation<\/a>You may appeal any disputed parts, but you may not take retaliatory action or withhold payments due simply because an employee files a complaint.<\/p>\n

How can Fidelity Law Firm assist companies in dealing with incompetent employees?<\/h2>\n

Fidelity Law Firm can assist in examining job performance and criteria for incompetence, performance evaluation systems and work rules, Performance Improvement Plans (PIPs) and reasonable improvement measures, last resort measures, termination notices and severance procedures, and assess labor-management mediation and subsequent litigation risks, based on the company's actual job positions and management information.<\/p>\n

Enterprises willLegal Consultant<\/a>When work is incorporated into personnel decisions, gaps in evidence and alternative methods can be identified before termination is announced; relatedEmployer-side labor law services<\/a>It can also be coordinated with internal HR processes. The approach should be based on case-by-case information, and should not substitute actual assessment for guaranteeing legal dismissal or winning a case.<\/p>\n

Frequently Asked Questions (FAQ)<\/h2>\n

If an employee's performance review score is only 60 points, can the company lay them off?<\/h3>\n

Scores alone are insufficient. There must be reasonable and clearly defined standards, specific work facts, evidence of incompetence, and improvement measures; internal passing scores are not equivalent to the legal severance threshold.<\/p>\n

Can an employee be dismissed if their performance fails to meet targets for three consecutive months?<\/h3>\n

Three months is not a legally mandated threshold for automatic dismissal. The reasonableness of KPIs, resource and market impact, individual liability factors, and improvement efforts should be examined; legality cannot be determined solely by consecutive failures to meet targets.<\/p>\n

Does a company have to implement a Product Information Plan (PIP) before it can lay off employees?<\/h3>\n

The law does not require each case to have a fixed name or a fixed number of days for the PIP, but reasonable improvements and last resorts still need to be evaluated; if there are other commitments in the contract or work rules, they should also be verified.<\/p>\n

Does the failure of a PIP (Performance Improvement Plan) necessarily mean that the severance pay is legal?<\/h3>\n

This does not mean that the goals are reasonable, the guidance was actually provided, the duration was appropriate, and there are still reasonable alternatives; the plan cannot be terminated solely based on its conclusions.<\/p>\n

If an employee performs poorly during their probationary period, can they be asked to resign directly?<\/h3>\n

The term "probationary period" cannot be arbitrarily terminated.Ministry of Labor's Explanation of Rights and Interests During the Probationary Period<\/a>There must still be a legally valid reason for termination, and the notice, severance pay, and notification must be handled in accordance with the law; working for less than three months does not mean that all obligations are waived.<\/p>\n

Should Article 11 or Article 12 apply if an employee refuses to cooperate with reasonable work instructions?<\/h3>\n

The judgment should be based on the specific behavior and its severity. The requirements, notice, severance pay, and time limits for determining incompetence differ from those for serious violations; performance issues should not be changed into serious disciplinary violations simply to save costs.<\/p>\n

Can a company require employees to sign a voluntary resignation letter?<\/h3>\n

Resignation documents may be processed on the premise of genuine voluntariness or free negotiation, and coercion, threats, or forced signing with false statements are prohibited. The name cannot replace the actual reason for resignation or its legal effect.<\/p>\n

If severance pay has already been paid, can the employee still claim wrongful dismissal?<\/h3>\n

Yes. Paying severance pay will not rectify the lack of a legitimate reason for termination; employees may still dispute the validity of the dismissal, the employment relationship, and wages. The company must respond with complete factual and procedural evidence.<\/p>\n

Is the company considering laying off underperforming or unsuitable employees?<\/h2>\n

If the company has completed employee performance reviews, made improvement requests, or is evaluating whether to terminate the employment contract, it is recommended to first compile the employment contract, work rules, performance records, improvement notices, and related communication documents, and have Fidelity Law Firm assess the legal requirements, procedures, and subsequent labor dispute risks for severance.<\/p>\n

Contact Fidelity Law Firm<\/a>|LINE Inquiry<\/a>|02-7709-3611<\/a><\/p>\n

Regulatory verification: October 24, 2026. This article provides general legal information; specific handling still requires assessment based on case details and applicable regulations.<\/p>\n\n\n

Further reading<\/h2>
<\/div>

Can a company directly dismiss an employee for serious misconduct, embezzlement, or breach of trust? How can a company investigate and file a lawsuit?<\/h3>

Legal content provided by Attorney Li Yusheng: When a company discovers that an employee is suspected of embezzling funds, accepting kickbacks, forging documents, or violating job duties, it should first preserve legally obtained relevant evidence, clarify the employee's job authority and the facts of the conduct, and simultaneously assess the termination date of the employment contract, criminal liability, and civil claims. A company's suspicion that an employee has problems does not mean it has the necessary\u2026<\/p>Read the full article \u2192<\/span><\/div><\/a>

<\/div>

What should a company do if it receives a labor mediation notice? Employee filing a complaint, labor litigation, and corporate defense strategies.<\/h3>

Legal content provided by: Lawyer Li Yusheng. What should be the first step when a company receives a labor dispute mediation notice? When a company receives a notice from an employee requesting labor dispute mediation, it should first confirm the competent authority, the mediation date, the employee's specific requests, the facts of the dispute, and the legal relationships involved. It should then immediately compile relevant personnel, payroll, attendance, and termination contract documents\u2026<\/p>Read the full article \u2192<\/span><\/div><\/a><\/div><\/section>","protected":false},"excerpt":{"rendered":"

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