Tolerating poor performance an employer’s peril

An employer who terminated an employee for poor performance has lost an unfair dismissal case before the Fair Work Commission and was criticised for its tolerance of the employee’s poor performance.

The employee was terminated for poor performance reasons. The employer relied on the employee’s failure to follow water quality monitoring and reporting procedures over a couple of years.  During the hearing, the employee made admissions that she had not complied with the particular procedures and the FWC found that she did not perform her duties to the standards required by the employer.  On that basis, the FWC found that the employer had a valid reason for the termination.

However, despite there being a valid reason, the FWC found that the employee had never been given a chance to improve her performance, noting that the employer had never taken the step of formally counselling or providing formal warnings to the employee. On this basis, the FWC held that the employee had been unfairly dismissed.

The FWC commented that:

“… [the employer’s] acceptance of [the employee’s] performance over a significant period of time means that it was unfair to terminate her employment without having provided her with clear notice that her performance was such that her employment was at risk. She was entitled to have her errors identified and she was entitled to be given an opportunity to improve her performance… If she had been properly managed, these problems would have been dealt with earlier and [the employee] may have been able to improve her performance. Because this did not happen, her dismissal was unfair.”

Implications for Employers

The decision serves as a good reminder to employers as to the necessary process required for terminating an employee for performance reasons. Employees who are not performing must be given formal warnings followed by an opportunity to improve their performance.  Prior to termination, an employee must be told that if they do not improve to the required standard, then their employment may be terminated. Failing to take the time to adequately manage poor performance will leave employers exposed to unfair dismissal claims.