When running a business, one of the largest challenges you will encounter is managing staff. This is especially the case when an employee’s services are no longer necessary, or if they are underperforming. In these instances, it is crucial that you, as a business owner, take careful steps to avoid any claims of unfair dismissal or unlawful termination.
What constitutes underperformance?
According to Fair Work, underperformance is identified as any of the following:
- Failure to perform work to a required standard or failing to carry out work at all;
- Failure to follow workplace rules, procedures and policies;
- Poor behaviour that is not acceptable in a workplace;
- Negative or unruly behaviour within the workplace.
Although you are not technically legally required to provide written warnings or even formal documentation of the dismissal process, we still recommend doing so to protect yourself as an employer. For example, an employee may argue that they were unfairly dismissed if they were not warned about performance issues and not given a “reasonable” opportunity to rectify said issues.
For this reason, Fair Work has provided a best practice guide when dealing with underperformance. Furthermore, we recommend taking the following steps when addressing staff issues.
- Clearly outline workplace policies
When hiring an employee, ensure they are fully aware of all workplace policies and expectations of their behaviour. This may include policies regarding sexual harassment and bullying, as well as employment contracts that clearly outline the staff member’s roles and responsibilities. Doing so ensures your employee is explicitly aware of your expectations with regards to their workplace.
You should also have written guidelines that outline the process for choosing employees for termination or redundancy in the event of a company restructure or downsizing. However, we recommend having your lawyer review these policies to ensure you are not unintentionally discriminating against any protected parties.
- Be consistent
Whether consciously or unconsciously, it is easy for managers to apply different standards and expectations to employees depending on their relationship or prior working history. It is crucial that you and your managers remain impartial and enforce the same expectations of conduct and performance to all employees, regardless of your personal opinions on the matter.
- Schedule regular evaluations
Generally speaking, it is best to schedule regular performance evaluations with all employees, even if they seem to be performing well. These evaluations will serve as warning systems should either you or your employee have any issues regarding their employment. Furthermore, they present an opportunity for both parties to discuss any workplace matters, as well as expectations and problem areas.
- Arrange a meeting immediately for ad hoc issues
Once your basic employee management systems are set up, you should have the tools to address any ongoing problems. However, circumstances may arise where unforeseen issues are brought to your attention. In this situation, it is crucial that you identify the specific areas of underperformance, and arrange a meeting with your employee to discuss this.
Your managers may prefer to avoid conflict, but communication is key when managing underperforming employees. Use this meeting as an opportunity to clarify the issue, and set a performance management plan in place to improve the situation. Give the employee the opportunity to address said issues, but don’t be afraid of outlining why they are underperforming and what is required to fix the situation.
- Keep clear documentation
After you have held the meeting, it is crucial that you or your manager create a written copy of the performance management plan. Make sure to include:
- The particular conduct or performance issue
- What was discussed in the meeting
- Clear and reasonable performance goals
- How you, as the employer, will assist with achieving these goals
- Dates for review or the completion of the task
- Consequences of failure to do so
If necessary, you may frame this as a “warning letter”, however this is not compulsory.
- Give your employee the chance to respond
Following this initial meeting, you will also need to give your employee the chance to respond to any allegations. They are not required to respond during the meeting, and may need time to prepare their response. If necessary, you may arrange another meeting for further discussion.
- Schedule follow-up meetings
Whether or not your employee’s behaviour has improved, it is important to schedule follow-up meetings to monitor their performance, as well as provide ongoing feedback and support if necessary.
- Allow employees to have a support present at meetings
Under the Fair Work Act, the Fair Work Commission will consider whether you allowed an employee being disciplined to have a support person present as one important consideration when looking at whether the process leading to their dismissal was fair or not.
In fact, allowing your employee to bring in a third party (whether this be a union representative, lawyer, or emotional support), is highly considered a matter of “natural justice” or “procedural fairness”, even if it is not legally required under the Fair Work Act.)
Managing employees can be a tricky business, which is why it’s important to clearly document all your employee procedures, and give them the chance to rectify their behaviour. Avoid any chance of litigation with unfair dismissals or unlawful terminations and get in touch with the team at AV Lawyers today to arrange a free consultation.