Dispelling the myths about dismissal for poor performance

Terminating employees for performance based issues can be difficult for employers to navigate at the best of times. An employer’s right to terminate because of poor performance has not been helped by a number of myths that have taken hold in this area. Take for example the “3 strikes and you’re out” rule which many employers follow believing it will protect them from unfair dismissal claims. That is simply wrong, and slavish adherence to these “rules” often leads the employer to overstep the mark between a reasonable dismissal and a dismissal that is harsh and unjust, and leaves the employer exposed.

In reality, there is no one “rule” to follow when dismissing employees, particularly where the dismissal is performance based. The process need only be fair and reasonable in the circumstances of each particular case.

Employment and Industrial Relations Lawyer, Laura Gercken from ClarkeKann Lawyers, provides the following tips to help minimise your risk of an unfair dismissal claim.

3 strikes and you’re out?
Not any more.

• Action incidents of poor performance with the employee by:
– IDENTIFYING each specific manifestation of poor performance
– MEETING with the employee (and any support person requested by the employee to attend). Preferably there should be 2 people from the employer at that meeting
– TELLING the employee the conduct or performance is not acceptable and that it will be monitored over a specified period of time (usually at least 1 month)
– WARNING that the matter is serious and that if performance is not improved, disciplinary action may follow, including termination of employment
– ENSURING that the employee is given a WRITTEN STATEMENT (preferably under letterhead) setting out each of the performance issues discussed, and remedial action the employee is expected to take, and
– MONITORING the employee’s ongoing performance as the employee must be given an opportunity to improve their performance. This is critical in any assessment of whether or not a dismissal is “harsh, unjust or unreasonable” for the purposes of an unfair dismissal claim.

• If there is no improvement in performance or further incidents occur, then you should again follow the procedure in respect of the ongoing issues and any new issues that have occurred since the first meeting with the employee. Provide the employee with a further letter setting out each of the matters discussed at the second meeting and give them an opportunity to respond to the issues raised and offer a suitable plan moving forward to improve their performance.

• If the employee does not provide a suitable plan and you feel the employment relationship is no longer tenable, then you can terminate their employment. Many variables can impact on the process, including:

  • The seriousness of the performance issues and the consequences of the performance issues to both the employee and the employer (eg. health and safety issues)
  • The nature of the business
  • The tasks performed by the employee within the business, and
  • The length of time that the employee has been employed.

Importantly, don’t rush the process, as the time provided to employees to improve performance is often a critical factor when assessing whether or not a dismissal is “harsh, unjust or unreasonable”. Getting the process right will minimise fall out and help you to withstand claims for reinstatement or compensation of up to 6 months’ wages. Needless to say, if in doubt seek advice.

You can contact Laura at ClarkeKann’s Sydney offices on 61 2 8235 1222