In times of economic decline, employers pay very close attention
to their bottom line. As a result, underperforming employees will
often be the first in the firing line. But what is the best way to
deal with such employees?
Prudent employers need to ensure that at all times they have
effective performance management systems in place to ensure that
peak performers are encouraged and poor performers are dealt with
in a constructive and appropriate way. More than ever, with
employers acutely aware of their companies' financial
performance, the issue of managing poor performance of individual
staff is featuring as a priority. Some employers in this situation
immediately look for a restructuring option and a resulting
redundancy for the non performing employee. However, this is not
consistent with an employer's obligations of good faith and can
be a high risk scenario. Consequently, employers should return to
the concept of best practice management and deal with performance
issues in a constructive manner to ensure that employees are
performing at an appropriate level or are appropriately dealt with
by way of performance management.
It is critical for employers to follow a proper performance
management process to ensure any subsequent claims of procedural
unfairness are avoided. The first obligation employers have which
needs to be kept front of mind when dealing with performance
issues, is to deal with any problem as soon as it arises.
It is often a helpful preliminary step to have an informal chat
with the employee and discuss the performance issue with them. In
some cases, it might be as simple as bringing the performance
concern to an employee's attention, as they may not have
realised it an issue, or there may be a legitimate explanation for
their behaviour. However, any informal discussion should be
recorded in writing and placed on the employee's personnel
files. If the matter is not resolved, the employer will need to
commence a formal performance management procedure.
Holding a formal meeting to discuss the problem.
Giving the employee the opportunity to improve.
Taking action where performance does not improve.
Remember that any action taken must be in compliance with
employment agreements, policies and procedures, and the good faith
If you would like to discuss your options around which action to
take and setting up a fair process, please do not hesitate to
DLA Phillips Fox is one of the largest legal firms in
Australasia and a member of DLA Piper Group, an alliance of
independent legal practices. It is a separate and distinct legal
entity. For more information visit www.dlaphillipsfox.com
This publication is intended as a first point of reference and
should not be relied on as a substitute for professional advice.
Specialist legal advice should always be sought in relation to any
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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