In recent weeks I’ve been talking to clients about managing underperformance and the discussion we are having tends to start with “I have an employee who has not been performing to my expectations for some time. Can I terminate them?”

My answer is usually “Well, that depends!”

If you are unlucky enough to find yourself with an unfair dismissal claim, the Fair Work Commission will assess the process that led you to this point.

So there are lots of things to consider before you go down the path of terminating an employee. However, the one I am going to talk about here is around process and procedural fairness.


procedural fairness when managing underperformance

Procedural fairness according to the Fair Work Commission is fairly straightforward:

  • Has the employer followed their own procedures in dismissing an employee?
  • Has the employee had the opportunity to explain their side of whatever happened?
  • Has the employee been able to seek advice or have a support person available at a meeting?

In day-to-day language, this literally means that:

  • Employers need a process for performance management that includes understanding obligations according to Fair Work.
  • Employers should have an employment contract, position descriptions, and an induction process. These documents ensure that expectations, policies and procedures are clear from the outset and ongoing during the first few months of employment.
  • Leaning on probation as an ‘out clause’ doesn’t always wash.
  • Employers should have a process for dealing with performance issues.


get your house in order

As an employer, you must ensure that you follow certain steps when managing performance. I may sound like a broken record, but if you do not have the following in place, you have a lot of risk in your business:

  • An employment contract [a good one].
  • A Position Description with detail that allows you and the employee to measure their success in the role.
  • An induction and onboarding process that covers off training the person for the role.
  • Policies and Procedures that guide acceptable behaviour, expectations, and the performance management process.
  • A performance review process that enables you or your managers to have regular discussions about performance, provide constructive feedback and check in on goals and measures.

All of these things [not just one or two] along with skilled managers who work on having trusting and honest relationships with their employees, will absolutely help to prevent underperformance and give the foundation to create a great culture.


grounds for an unfair dismissal claim

If the horse has already bolted and you have an employee who has not been performing to your expectations you may be looking at termination options.

But before you do, if any of the following are true, your grounds for fair termination may not be so sound:

  • They do not have a position description.
  • You haven’t met with them to discuss their performance recently.
  • If you have met with them, it was casual, and you didn’t follow up with documentation or a plan of action for performance improvement.
  • You have mentioned a few tasks on the fly but haven’t followed up formally.
  • You have no notes or record of the issues.
  • They have been an employee for at least 6 months.

If you spring a termination on them based on performance without considering the above, you could find yourself with an unfair dismissal claim on your hands.

I would lay bets on the reaction the employee would give to a statement like “you are not performing to my expectations.” They are likely to reply with something like “Since when?”

I understand that you’ve decided it’s getting unbearable [because you haven’t addressed it], but unfortunately, this doesn’t mean that you can simply call it and terminate the employee. This is unfair to the employee and the fair work commission will agree.


managing underperformance

Let’s look at how we can put an easy-to-follow process in place to help with managing underperformance, then should you still look to terminate in the future, you will have reduced your risk of an unfair dismissal claim.

Warning – You will need to play a longer game than you think.


stop avoiding the tough conversation and request a meeting

If you are avoiding a difficult conversation, the situation isn’t going to get any better. You need to sit down and have the chat.

How you approach this will depend on your relationship with the employee and whether you have regular meetings.

It is important to inform the employee of the purpose of the meeting in advance.

You could say something like “I would like to catch up with you next week to discuss your role and a few areas that I would like to help you improve on.”

Why take this approach?

  • If it is going to come as a surprise, then you want to ease into it.
  • You are going to be setting an improvement plan. Why? Because your duty of care to an employee is to raise the issues, allow them to respond, set or reset expectations and provide reasonable time and support for them to have the best chance to improve.

Allowing an employee to not meet expectations for a long period of time is on you, as the leader.

To guarantee a successful meeting:

  • It should be in a private, comfortable, and quiet location – with no chance of interruptions.
  • As the employer and leader of the meeting, be prepared. Even send some information to the employee in advance [i.e. we are going to talk about time spent on tasks, and see where the roadblocks are, so if you could bring copies of your last two week timesheets, we can review them during our discussion].
  • Have an agenda and be specific, provide clear examples, and outline the improvement required and the consequences of continued poor performance.For instance, “achieving these deadlines is crucial to the business and when we miss them, it has a direct effect on our income. We will need to ensure that all deadlines are met from now on, and we will support you with training. If we are unable to get you there, we will need to assess whether this role is the right role for you long term.”
  • Once you have taken the employee through your examples and what is required, ask questions, and allow them to respond. Take as much time as needed here. Really listen and consider if any actions/improvements or goalposts need to change.
  • Agree on the plan and ensure the employee understands what is expected and where you will help and support them.
  • Document in detail with timelines, milestones, outcomes, and next review date [i.e. We will meet in 1 week to assess progress]
  • Set the next meeting.

The Fair Work Ombudsman has some great tools including a performance improvement form that you can use for your meeting right here.


we’re here to help

If you’d like to implement training in effectively delivering feedback or need a policy around performance management, get in touch with our People + Culture team at or give us a buzz on 1300BDEPOT.


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Originally authored by Anna Chipperfield. 


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