If you haven't told an underperforming employee their job is on the line before you move to dismiss them, then you are booking yourself in for a potential trip to the Fair Work Commission.
The warning is the essence of fair performance management. It's very difficult to defend your organisation against an unfair dismissal claim without it. It doesn't matter how obvious the employee's underperformance is – and how evident to the employee your unhappiness about it! You need to show you have taken the next step and conveyed to the employee that their ongoing employment is in jeopardy if they don't adequately address the underperformance.
A warning should usually be conveyed in person. It doesn't have to be in writing, although obviously it is a good idea.
An employee is not usually entitled to a support person in that meeting, but it's not a bad idea to offer them the chance to bring one.
You need to clearly explain the areas in which the employee is underperforming and why it is an issue for the employee's job and your business.
Ideally you would provide examples and seek a response from the employee. However, the employee doesn't have to accept or agree with the issues. So long as you have your facts right and are operating fairly, it is your prerogative to convey these matters to an underperforming employee.
You should nevertheless listen carefully to the reasons given by the employee for their underperformance. If they raise poor health or some external factor such as workplace bullying then you may need to investigate that matter. The fact these matters are raised don't mean you have to put up with the underperformance – but it makes it more difficult to fairly and lawfully dismiss the employee for that reason.
In the discussion you should indicate the period over which the employee's progress in addressing the issue will be reviewed. And the most important part – you need to tell them that if you decide at any time that satisfactory progress is not being made, the employee faces potential dismissal.
How many warnings? The old rule of a mandatory three warnings no longer applies (unless this is specified in a contract, policy or enterprise agreement applicable to your organisation). The appropriate number of warnings comes down to what is fair having regard to the nature and seriousness of the underperformance and what progress the employee is making to address the issue.
Some other questions my clients ask me about warnings are set out below:
- when will a warning become stale? The warning has currency so long as the performance issue remains unresolved.
- do I have to get the employee to sign it? No this is not essential. As I state above, the employee doesn't have to agree with your position on the underperformance.
- ok I haven't issued a warning – but this employee has to go. What are my options? This is when you have to offer an ex gratia payment or some other benefit in return for the employee's agreement to resign and release you from all claims and liability. You have to introduce this concept carefully as an alternative to warning process. If your position is "take the deal or leave" you are in effect dismissing the employee. This is a good time to get legal advice!
- what about misconduct? A warning is not essential for fair dismissal by reason of misconduct. If it's serious enough, and you've given the employee a chance to say why they shouldn't be dismissed for it, then you can dismiss for that reason. However if dismissal is an overreaction, then a warning will be appropriate.
Finally, remember not everyone is covered by unfair dismissal laws. If you are dealing with an employee who isn't covered by those laws, warnings are not generally required.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.