Underperformance employeeOf all the ways in which you can dismiss an employee, dismissing for underperformance is more complicated than terminating employment for inappropriate behaviour, fraud or theft.

The Fair Work Commission defines poor performance as; when an employee isn’t doing their job correctly, or is behaving unacceptably at work, and includes:

  • not carrying out their work to the required standard or not doing their job at all
  • not following workplace policies, rules or procedures
  • unacceptable behaviour at work, e.g. telling inappropriate jokes
  • disruptive or negative behaviour at work, e.g. continually speaking negatively about the company.

There is a difference between underperformance and serious misconduct

What you are asserting in a dismissal for underperformance is that the performance of the employee is poor, that you have informed them of such and they have failed to improve, and therefore there is no room for improvement, and it’s time for them to go.

However, the definition of underperformance is very subjective (see above) which has in the past been open to abuse by employers who are trying to rid themselves of employees who have ticked them off, or not done a particular job in the manner or to the level that was expected. Or the employer imposed the tag of underperformance to rid themselves of an employee for other reasons.

Employers must also be aware that the “three strikes and you are out” situation cannot be used to base underperformance dismissals on.

All employers, either in the Australian Security Industry or not, should follow a process when managing staff, including when managing their performance. When dismissing employees for underperformance, the Australian Human Resource Institute recommends a four-step process as follows;

Step one;

All employees should be on a performance management plan that clearly outlines their key performance areas, targets, review dates and agreed upon milestones. This plan should be in writing and signed off on by the employer and the employee. The plan should be placed in the employers file or personnel file and regularly reviewed at meetings. At the meeting, the employee’s performance against the criteria of the plan should be discussed and consensus reached on how they have gone. This meeting and outcome should be documented on the plan and filed back on the personnel file.

Step two;

If performance against the key performance areas and other measurable areas of the plan is below what is expected and agreed to, inform them that you are going to organise a meeting. You can inform them that they can have a support person present, although it’s not compulsory. Make it clear in the meeting that if their conduct doesn’t improve, you may have to dismiss them. Ensure this is in writing. Post meeting, have the employee think about how they’re going to improve, and then both parties should sign an improvement plan to set the employee back on track. Often this type of conversation will improve performance for some time, and it can sometimes be a permanent fix.

Step three;

If the conduct does not improve, then you need to take further action. Provide the employee with a formal written warning.

If this is not done, the employee has grounds to say that they had no idea there was a problem, or that the issue was resolved. You should never assume that they know there’s a problem. Staring daggers and the cold shoulder is not acceptable employee behaviour. The quicker you take action, the faster it will be resolved. You may have to provide the employee with more than one written warning. Although this sounds tedious and unnecessary, if you end up in the Fair Work Commission it is far better to be standing on the high moral ground than struggling to explain why the employee wasn’t given adequate chance to improve.

Step four, termination;

If attempts at improving performance have failed, you can terminate the employee. This is of course if the employee hasn’t already realised that they can’t match the requirements of the job or the whole situation is just getting too hard, and they resign. This is, of course, is the easy way out. If you don’t manage to garner a resignation, then follow this process;

Ensure they have received all their entitlements, including;

  • outstanding wages
  • any payments instead of notice
  • accrued annual leave or long service leave entitlements
  • redundancy or severance pay entitlements where applicable.

Double check that you are satisfied;

  • the reason for the dismissal is valid
  • the employee has been notified of the reason and given an opportunity to respond
  • that the warnings provided have been recorded and signed by at least the employer and preferably the employee. If the employee refuses to sign that, that refusal is noted on their personnel file and performance plan, and
  • you have complied with all requirements of the National Employment Standard and that this complying has been recorded on the personnel file and the management plan

Organise a meeting, tell the employee of the reason for the meeting and offer the employee a support person. The meeting should be held in a neutral setting such as a conference room, with at least a witness appointed by you and preferably one from the employee as well.

The termination should be both verbal and written in the form of a termination letter that puts your decision in writing and explains how and when final compensation and benefits will be distributed. Notes should be taken to document the employee’s response, and all of these documents should be kept in the personnel file. If all goes well, hopefully, you won’t ever need them.

One final note; although this might be stressful for you, it is also very stressful for the employee. The Fair Work Ombudsman has repeatedly stated that “Failing to dismiss an employee appropriately and sensitively can lead to unhealthy and unproductive outcomes that may affect your entire staff.”

Greg Byrne
Greg Byrne is CEO and director of Multisec Consultancy Pty Ltd, a multi-faceted consultancy advising CEOs and boards of security organisations in Australia on best approaches to manage business risk, particularly operations, disaster recovery, business continuity and human resources.