Tough conversation: An employer’s reminder to employee fails to count as performance warning

There are often misconceptions about how many times an employee must be warned regarding their poor performance before they are able to be dismissed. Although there is no legislative requirement stipulating the number of warnings required, the Fair Work Act 2009 (Cth) (FW Act) provides that an employee must be warned about their unsatisfactory performance before they are dismissed for that reason.

In McCallum v Everstone Pty Ltd [2022] FWC 782, the Fair Work Commission (FWC) has reiterated that a prior clear and documented performance warning will be required in order to avoid finding that a dismissal on the basis of poor performance was unfair.

In July 2021, the employee made an application to the FWC alleging that she had been unfairly dismissed from her employment.

The employee claimed that she had no indication prior to the dismissal that her employment was at risk.

The Employer submitted that during the course of her employment, the employee:

  • had a poor attitude and a rude telephone manner;
  • received continuous complaints from customers;
  • could not do touch-type therefore was very slow on the computer;
  • could not multi task, for example, refused to take phone calls while processing an order; and
  • did not follow supervisors’ instructions.

The employee submitted that at the time of her dismissal she was told “there was nothing wrong, it is just a business decision.” The employee also disputed the Employer’s assessment of her performance and claimed that there had only been one time where she was reminded to be more mindful about the manner in which she spoke to customers.

Commissioner Matheson considered the Employer’s evidence, in particular that the employee’s performance was having a negative impact on the team. She was satisfied that the employee’s performance was poor and that this was a valid reason for dismissal.

However, the Commissioner Matheson found that the employee was not afforded procedural fairness because she had not been warned about her unsatisfactory performance prior to the dismissal.

The Commissioner stated that a warning for the purposes of section 387(e) of the FW Act must clearly identify:

  • the areas of deficiency in the employee’s performance;
  • the assistance or training that might be provided;
  • the standards required; and
  • a reasonable timeframe within which the employee is required to meet such standards.

Commissioner Matheson found that the Employer only provided a “general reminder” rather than a warning to the employee. Further, no areas of deficiency in the employee’s performance were clearly identified by the Employer and put to the employee.

Commissioner Matheson commented that it seemed likely that the Employer was “avoiding what would have been a difficult but necessary conversation”. She noted that rather than bringing the Employer’s concerns to the employee’s attention in a transparent manner so she could properly address them, knowing that her employment was at risk if she did not, the Employer merely gave “subtle hints” that improvement might be required.

The dismissal of the employee was found to be harsh and the employee was unfairly dismissed. Commissioner Matheson made an order for compensation to the employee in the amount of $7,484.17.

Lessons for employers

Where an employee is dismissed for poor performance, it is important to demonstrate that the employee was warned about their poor performance and that they were provided with the opportunity to improve. The warning should clearly identify the aspects of the employee’s performance of concern and the consequences of failing to meet the required performance standards.

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