Warnings – unsatisfactory performance

See Fair Work Act 2009 s.387(e)

Warnings become relevant when an employee is dismissed for unsatisfactory performance.

Unsatisfactory performance is more likely to relate to the employee's capacity to do the job than their conduct.[1]

Performance includes 'factors such as diligence, quality, care taken and so on'.[2]

The Fair Work Commission must take into account whether there was a period of time between:

• an employee being warned about unsatisfactory performance, and
• a subsequent dismissal.[3]

This period of time gives the employee the opportunity to understand their employment is at risk and to try and improve their performance.[4]

Warnings must identify the relevant aspect of the employee's performance which is of concern to the employer.[5] A mere exhortation to improve is not sufficient.[6]

The warning must make it clear that the employee's employment is at risk unless performance improves.[7]

Employee was warned

Employer followed a fair performance management process – employee was warned, informally and formally

A v The Commonwealth of Australia, represented by Centrelink [2011] FWA 3532 (O'Callaghan SDP, 6 June 2011).

Permission to appeal was refused in [2011] FWAFB 6612 (Watson VP, Ives DP and Bissett C, 11 October 2011).

The employee was dismissed for failing to achieve the goals in her performance improvement plan. The employee had received several warnings, both formally and informally.

It was found that, although the employee had a psychiatric condition, the employer was not being unfair in applying normal performance expectations. It was held that the dismissal was not harsh, unjust or unreasonable.

Employee received a number of warnings about both performance and conduct

Aperio Group (Australia) Pty Ltd (T/a Aperio Finewrap) v Sulemanovski [2011] FWAFB 1436 (Watson SDP, McCarthy SDP, Deegan C, 4 March 2011), [(2011) 203 IR 18].

The employee was dismissed after a long history of misconduct and performance-related issues. The employee was involved in multiple counselling sessions and received both written and verbal warnings over a 2 year period. There was no improvement demonstrated by the employee.

The Commission found that the employee was warned about his unsatisfactory performance before the dismissal. He received written warnings in relation to the loss of product/faulty product, not wearing a proper uniform, failure to check production orders, not running machines at proper speed, absences from his work station during working hours without reason and failure to wear personal protection equipment. Multiple written warnings were given in relation to some of those issues and the warnings often dealt with more than one issue. Attendance issues and absences from the factory, without authority, were subject to written and informal counselling on multiple occasions and one written warning in respect of absences from the factory.

It was held that there was a valid reason for the dismissal and sufficient warnings were given. The application was dismissed.

Employee was NOT warned

No warning regarding poor performance given – found that the employee was unfairly dismissed

Martin v Donut King Chirnside Park T/A Hersing Pty Ltd [2012] FWA 2905 (Smith DP, 19 April 2012).

The employee was employed as a casual employee in a small business for some 5 years. She was terminated for alleged poor performance but received no warnings.

It was found that an employee must be warned that her poor performance may result in termination. Such a warning was not given in this case. The termination was found to be harsh, unjust and unreasonable.

Warnings for poor performance not consistent

Andersen v Acquista Investments P/L and Veolia Environmental Services (Australia) Pty Ltd T/A Integrated Waste Services [2011] FWA 4560 (Hampton C, 28 July 2011).

The employee was dismissed for late attendance, as well as other matters such as the failure to obey a no smoking directive. The Commissioner found that there was evidence that management and other employees also smoked in the office in contravention of the directive. The Commissioner similarly found that the warnings in relation to late attendance were a valid concern but inconsistently applied.

The Commissioner held that the inconsistency in the employer's attitude towards late attendance and smoking undermined the directives and warnings given. It was held that there was no valid reason for dismissal and that the termination was unfair.

No formal warnings provided

Dean v Sybecca Pty Ltd t/as Sleepy Lagoon Hotel [2010] FWA 8462 (Richards SDP, 4 November 2010).

The employee was dismissed for performance and conduct issues. It was found that the employee was never expressly warned that his employment was in jeopardy.

It was held that, although the employer was a small business and did not have human resources expertise, the employer was required to openly communicate with the employee about their concerns and to provide an opportunity for improvement. It was held that the termination was harsh, unjust or unreasonable.

Pre-prepared scripts and written warnings suggested pre-determined outcomes

Joshi v Panasonic Australia Pty Ltd [2010] FWA 2946 (Cambridge C, 15 April 2010).

The employee was dismissed for poor performance. It was found that the employer had pre-prepared a script regarding the warnings to be given before disciplinary meetings took place. This suggested that the meetings had pre-determined outcomes.

It was concluded that the meetings were simply a 'mechanical process' that did not genuinely afford the employee an opportunity to respond to the warnings or affect the outcome of the meeting. It was found that there was no valid reason for dismissal and held that the termination was unfair.

Non-compliance with an enterprise agreement

Mawkes v State of Victoria (Department of Human Services) (2006) 161 IR 34.

The employee was dismissed for misconduct. The employee was issued a final warning after the employer conducted an investigation into the misconduct.

The Federal Court found that the employer was obliged, under the applicable certified agreement, to comply with a number of procedural steps before issuing a warning. The Court held that the warning was invalid as the correct process had not been followed.