In every workplace, employers are faced with having to deal with underperformance or misconduct. If not addressed, performance and behavioural issues can eat away at team morale, productivity and the organisational culture. However, if not managed correctly, the handling of performance and behavioural issues can open the door to expensive claims before the courts or the Commission, such as claims for unfair dismissal, discrimination or adverse action. For the lawyers advising these employers, finding the balance point between being fair and compliant is a delicate one.
Distinguishing Performance from Misconduct
Prior to taking any action, it is important for a manager to understand the difference between performance and misconduct. The difference is as follows:
- Performance: This is about an employee not being able to meet the inherent requirements of their job. It may include not meeting KPI’s, repeated mistakes, or a lack of timekeeping.
- Misconduct: This is an employee contravening a workplace rule or behaviour standard. This may include wilful insubordination, theft, harassment or other serious safety incidents.
One would generally have different responses to the other. Performance issues typically involve a more managed support and improvement approach. Misconduct would usually be addressed through a formal disciplinary response. Guiding managers through this will result in more proportionate and defensible outcomes.
Procedural Fairness: The Cornerstone
Courts and tribunals regularly remind employers and managers of the importance of procedural fairness when dealing with workplace matters. For lawyers, this means advising managers to implement fair, transparent and respectful processes. Essential elements include:
- Clear communication: Employees should be told what is bothering management in clear and precise language, backed by specific evidence (e.g. performance data, evidence from witnesses).
- Opportunity to respond: Workers should be given a genuine opportunity to explain their side of the story, and not made to feel that a decision is a foregone conclusion.
- Support persons: Permitting employees to have a support person present at meetings is a good way to show that you are being fair, as well as satisfying Fair Work Act requirements.
- Impartiality: Decisions should be made by managers who are unbiased or free from actual or perceived prejudice.
Ensuring procedural fairness is a key ingredient of any process, not only in terms of legal defensibility but also in maintaining trust in the process.
Managing Performance Issues
In terms of poor performance, lawyers recommend managers adopt a performance management framework that allows a focus on remediation, before moving to dismissal as a last resort. They should consider:
- Written performance plans: Specific, measurable and attainable goals with clear timeframes.
- Consistent feedback: The use of positive and constructive feedback throughout the performance management cycle.
- Training and resources: Whether performance gaps relate to skills gaps, and if so, arranging training or other support.
- Escalation pathways: The consequences of non-performance, including formal warnings, further training and ultimately termination.
Employers who can evidence each of the above steps will be in a much stronger position to show that dismissal was a last resort, which may limit exposure to unfair dismissal claims.
Addressing Misconduct
When dealing with misconduct, the process is inherently more formal and risk-laden. Lawyers should ensure managers take a measured approach:
- Investigation: must be thorough, impartial and confidential. May require witness interviews and evidence gathering.
- Suspension (where appropriate): for more serious allegations, it may be appropriate to suspend the employee on pay pending the outcome of the investigation, to preserve the integrity of the process.
- Show cause process: before determining disciplinary action, the employee must be given written notice of the allegations and an opportunity to respond.
- Proportionate response: The response to the misconduct (sanctions) should be proportionate to the seriousness of the misconduct and may range from counselling to termination.
Failure to follow these steps can expose employers to claims of breach of contract, unfair dismissal, or unlawful adverse action.
Common Legal Pitfalls
Advising managers involves highlighting common missteps that give rise to claims:
- Inconsistent treatment: Dealing with similar cases inconsistently may result in allegations of discrimination.
- Poor documentation: where there is no contemporaneous record of meetings, warnings, or performance management plans, etc., employers may have difficulty justifying their decisions.
- Prejudgment: deciding on disciplinary action, without first hearing the employee’s side of the story, can compromise procedural fairness.
- Retaliatory action: where disciplinary action is taken in response to an employee having exercised a workplace right (for example, making a complaint), this may constitute unlawful adverse action.
Early recognition of these risks allows managers to avoid taking action that may inadvertently bolster an employee’s claim.
The Lawyer’s Role in Dispute Prevention
Lawyers advising in this area should not only provide reactive support but also adopt a preventive advisory role. This can include:
- Drafting clear workplace policies on conduct, grievance handling, and performance management.
- Training managers on the principles of procedural fairness and lawful decision-making.
- Establishing step-by-step guides for handling performance and misconduct.
- Encouraging proactive communication between employees and managers to address concerns before they escalate.
Embedding good practice reduces the likelihood of disputes reaching the Fair Work Commission or courts.
Continuous Learning for Lawyers and Managers
Employment law is dynamic, shaped by legislative changes and tribunal decisions. Lawyers must stay current with developments to provide sound guidance. Attending professional events such as an Employment Law Conference, is invaluable for understanding trends in case law and regulatory enforcement. Similarly, niche programs like Schools Law CPD sessions can assist lawyers working with education sector clients, where employment issues often involve unique considerations such as child safety obligations.
Equally, equipping managers with ongoing training ensures that compliance is embedded at all levels of the organisation.
Managing performance and misconduct lawfully requires more than technical compliance with workplace laws—it demands fairness, consistency, and transparency. Lawyers advising managers play a crucial role in balancing the rights of employees with the operational needs of businesses. By distinguishing performance from misconduct, embedding procedural fairness, and implementing structured frameworks, legal advisers can guide employers through processes that are both legally defensible and respectful of workplace relationships.
