By the business life very nature, employers expect from their employees to improve their performance and efficiency consistently. However, employees’ performances could be decreased by the reason that is not based upon the employee. In some cases, employers terminate the contract by alleging the underperformance of the employees for their own hand. Professional Inability (Performance) of the Employee The causes arising from “inability of the employee” which are regulated in Article 18/1 of the Labour Act are valid for the termination of the labour contract. According to that article following causes are valid for the termination: Showing less performance than the other employees who do the similar jobs, loss of concentration, does not have suitability for the work, insufficiency of learning and improving themselves, getting sick frequently, having an illness hinders work continually without avoiding the employee to work, inefficacy of coordination, reaching the age of retiring. Therefore, as a rule professional inability (performance) of the employee cannot be valid reason for the termination. Employer can terminate the contract for valid reasons, in case the employees cannot fulfil the expectations, despite there is a labour contract between the employee and the employer or workplace personnel regulations, corporate working principles or criteria of performance evaluation. The underperformance should be consistent to terminate the agreement for valid reasons by the employer. Ultimate Remedy (Ultima Ratio) According to the preamble of Article 18 of Labour Act, before the termination of the contract there are some methods that should be adopted by the employer as training the employees or employing them in different work and giving a warning to them. In case these methods fail to satisfy, the termination may be implemented as an ultimate remedy. Ultimate Remedy is a rule that is limited with performance and collaboration of the employee. Supreme Court declares the terminations shall be null and void, in case they are not made within the framework of ultimate remedy rule. Procedure of The Termination Warning the Employee Employer should give a written warning to the employee, if there is an improvable situation as working with less efficiency than the other people who do the similar jobs or there is an inefficacy in their performance or collaboration. However, giving a written notice shall not be an obligatory unless it is possible for the employee to change or improve themselves in this regard. Term of The Termination There is not any provision regulated under The Labour Act regarding a term to terminate the contract by the employer. However, in accordance with good faith, it will be safe to make the termination notice within reasonable time from the reason of termination occurs. Termination of the Contract Procedure In accordance with Article 19/1 of Labour Act, employer is obliged to make a written notice to the employee to terminate the contract. Written form is a condition for the validity of the termination. Formulating the Cause of Termination In accordance with Article 19/1 of Labour Act, employer is obliged to formulate the cause of the termination. Taking the Employee’s Statement In accordance with Law Article 19/2, permanent employment contract cannot be terminated without taking the employee’s statement against claims. OBJECTION TO THE TERMINATION NOTICE Term of Litigation Within one month from the notice, a law suit can be brought in Labour Courts. CONCLUSION: It is a valid reason that showing less performance than the other employees who do the similar jobs or underperforming to terminate the contract. Mostly, employers lose the reemployment lawsuits opened owing to underperformance. In this regard, for basing a valid reason to terminate the contract following points should be taken into consideration; The termination should not be made without taking the employee’s statement and the employee should be forewarned. The criteria of performance evaluation should be predetermined and notified to the employee. Employer should notify the termination by formulating the reason of the termination to the employee and the underlying reason of the underperformance should be researched. In case the underperformance of the employee ascertained, they should be trained, however, if the employee does not get better after that training or that training is not accepted, the termination shall be applied as an ULTIMATE REMEDY.