Performance Standards: A Common Pitfall in Termination for Poor Work Performance under Tanzanian Labour Law

Under Tanzanian labour law, employers are permitted to terminate employees for poor work performance, provided such termination meets the standards of fairness and procedural compliance set out in the Employment and Labour Relations Act, [Cap. 366 R.E. 2019] (the ELRA) and its supporting rules.

This article explores what constitutes valid performance standards, the legal requirements under Rule 17 of the Employment and Labour Relations (Code of Good Practice) Rules GN No. 42 of 2007 (the Code of Good Practice), and the judicial position on this issue, with reference to key Tanzanian case laws.

Legal Framework for Termination Due to Poor Work Performance

Section 37(2)(a)(ii) of ELRA provides that termination is unfair if the employer fails to prove that the reason for termination is valid and fair, related to the employee’s capacity, conduct, or operational requirements of the employer. Poor performance is classified under capacity-related termination, which is governed procedurally by Rule 17 of the Code of Good Practice.

Under Rule 17, before terminating an employee on the ground of poor performance, the employer must:

• establish that a performance standard exists;
• prove that the employee was aware or could reasonably be expected to have been aware of the standard;
• provide evaluation, training, guidance or counselling;
• allow the employee a reasonable period to improve; and
• if there is no improvement, conduct a fair incapacity hearing before termination.

What Constitutes a Performance Standard?

Performance standards are measurable, objective, and job-specific benchmarks against which an employee's output and conduct are evaluated. These can be reflected in:

• Job descriptions;
• Key Performance Indicators (KPIs);
• Internal policies or standard operating procedure (SOPs);
• Employment contracts; and/or
• Written targets or sales goals.

For a performance standard to be enforceable under Tanzanian law, it must be:

• Clear – unambiguous and easy to understand;
• Reasonable – realistic and aligned with the employee’s role and resources;
• Known – communicated to or reasonably expected to be known by the employee; and 
• Objective – capable of being measured without bias.

The Common Pitfall: Absence or Vagueness of Performance Standards

In many cases, employers terminate employees based on vague or unwritten expectations. This is a major legal risk. Tanzanian courts and the Commission for Mediation and Arbitration (CMA) have consistently ruled that termination is unfair where clear performance standards do not exist or were not properly communicated to the employee.

Even when performance standards are in place, failure to apply them consistently or to document performance issues in the employee’s record weakens the employer’s case in any legal proceedings.

Judicial Interpretation: Relevant Tanzanian Case Law

The following are Tanzanian case laws which show the current legal position in relation to termination due to poor work performance:

Tanzania Breweries Limited v Leo Kobelo Civil Appeal No. 147 of 2021  

In this case, the Court of Appeal of the Tanzania (the CoA) examined whether the employer had followed fair procedures prior to terminating the employee's contract. The CoA reaffirmed that employers are required to establish clear, reasonable, and measurable performance standards, and to ensure that employees are adequately informed of those standards.

The CoA held that Tanzania Breweries Limited failed to demonstrate that the employee had been made aware of the performance expectations or had been given a fair opportunity to improve. Furthermore, the CoA found that the employer had not conducted a proper investigation into the alleged poor performance and had not issued valid or sufficient warnings. As a result, the termination was deemed procedurally unfair.

Stanbic Bank Tanzania Limited vs Hellen Makanza, Revision Application No. 90 of 2023 

In this case, the High Court (Labour Division) (the Labour Court) reiterated the obligation of employers to establish clear and reasonable performance standards, ensure that employees are fully informed of these expectations, and provide necessary support mechanisms. Importantly, the Labour Court emphasized that employees must be given adequate time to improve before termination is considered. The judgment also highlighted the necessity of conducting a fair hearing and proper investigation in accordance with the principles of natural justice in employment disputes.

Bruce E. Massawe v Bank of Africa (T) Limited, Civil Appeal No. 366 of 2021

The CoA addressed key elements of procedural fairness in dismissals based on poor performance. It evaluated whether the employer had set clear performance expectations, communicated these standards effectively, offered adequate support and a reasonable improvement period, and ensured that a fair hearing was conducted prior to termination. The CoA reaffirmed that failure to comply with these procedural safeguards renders a termination unfair.

Best Practice Recommendations for Employers

To lawfully terminate an employee for poor work performance, employers in Tanzania must follow a structured and legally compliant process. The following best practices are recommended:

• Establish clear, measurable performance standards aligned to each job role;
• Communicate these standards clearly to employees during onboarding, supervision, and performance discussions;
• Conduct regular performance evaluations and maintain records of appraisals;
• Identify underperformance early and document it through reports and formal assessments;
• Provide support to the employee, which may include training, mentoring, or implementation of a formal Performance Improvement Plan (PIP);
• Allow the employee a reasonable and documented opportunity to meet the required performance standards; and
• If there is no improvement, convene an incapacity hearing in accordance with Rule 17 of the Code of Good Practice, ensuring that the employee is given a fair opportunity to be heard before any decision is made.

Conclusion

Termination of an employee on the ground of poor work performance is only lawful if it is based on known, measurable, and reasonable performance standards, and if the employer follows the procedure outlined under Rule 17 of the Code of Good Practice. Failure to comply with these requirements exposes employers to claims of unfair termination, which may result in reinstatement orders or significant compensation awards.

Employers are therefore strongly advised to implement clear job descriptions, establish objective performance standards, conduct regular performance reviews, and maintain thorough documentation. These measures are essential to ensure legal compliance and reduce the risk of adverse outcomes in the event of litigation.