A Proper Ending

Sunday, August 1, 2010 - 08:52

Terminating an employee due to unsatisfactory work performance is difficult for all involved. Peter Hughes sets out the steps to managing the process fairly.

For most purposes, the rights and duties of both employers and employees are governed by the Fair Work Act 2009. No less than 277 sections are specifically devoted to individual rights and responsibilities, including 27 sections devoted to claims of unfair dismissal.

Apart from voluntary resignation, termination of an employee may arise for a number of reasons, but termination due to unsatisfactory work performance is the procedure we will look at here.

To 'finish up' an employee who was engaged on an indefinite basis is unpleasant for all concerned. For the person suddenly out of a job, they may be devastated and a reasonably strong reaction (apart from outright abuse) is to be expected.

If the employee takes the matter to Fair Work Australia and a finding is made that the dismissal was harsh or unfair - the two terms are effectively the same - or, worse, unlawful, the financial consequences to the employer may be severe.

Avoid undue hurt

Terminations, therefore, should be managed in the most effective and transparent way possible, so that undue hurt is avoided and every step of the dismissal process can be justified later on, should this be necessary. The steps to consider are:

  1. Is the employee's work performance unsatisfactory?
  2. If the answer is 'yes', ask yourself the following questions:
  3. Has the employee's performance been so unsatisfactory that termination is justified?
  4. If the answer again is 'yes'. Has the matter been discussed with the employee?
  5. Has the employee been given adequate representation by an advocate or support person, including an interpreter, at those discussions?
  6. Has the employee been warned in writing that unless his or her performance improves he or she will be dismissed?
  7. Has the employee been given sufficient opportunity to improve his or her performance?
  8. Have written records of the interview or interviews been kept?
  9. Have counter-allegations or explanations by the employee been thoroughly investigated?
  10. Have all interviews, investigations, and incidents been thoroughly written up and signed by the appropriate parties?
  11. Has the employer or have the employer's managers or subordinates contributed to the employee's unsatisfactory workplace performance? (If the behaviour of work colleagues at any level leads to termination it is known as constructive dismissal and viewed very seriously.)

The answer to every question from three to 11 must be 'yes' if the employee is to be treated fairly and a dispute avoided.

Termination process

Generally, termination of an employee requires a high degree of procedural fairness and application of natural justice. The following points provide a guide to fairly managing the termination process:

  • Tell your employee that their work performance has been unsatisfactory and that you intend to interview him or her to investigate the matter.
  • Set a time and date for that interview and make it as mutually convenient as possible.
  • Inform the employee that he or she is entitled to be represented by a third person, or have another support person and an interpreter, if necessary, present at the interview.
  • Conduct the interview yourself and have another representative of your company present.
  • Make written notes of all the proceedings.
  • Inform the employee of specific instances of unsatisfactory work performance and be prepared to produce supporting evidence, if necessary.
  • Put the allegations to the employee and ask him or her to respond to them.
  • Consider the action you propose to take in the light of the employee's response or responses.

In most cases the employee will respond positively, either by citing adverse circumstances of which the employer was not aware, or by accepting the need for improvement and promising to work towards that end. If the employee offers reasonable justification for his or her poor performance, the interview should be adjourned pending further investigation.

On no account should the interview be abandoned. You, the employer, have made an allegation against the employee and it is up to you either to act on it or tell the employee that his or her explanation has been accepted and no further action will be taken.

Once the facts have been ascertained, some form of mentoring or further training may be required and should be offered, especially if the employee suggests it and expresses a willingness to cooperate.

A written record

Whatever the outcome of the interview, you should make a written record of who said what and give the employee a letter summarising the discussions.

If the allegations of poor performance stack up, the letter should include a statement to the effect that a lack of improvement within a stated time frame will result in termination, or some other disciplinary action. The letter should be firm, courteous and positive, as far as is possible.

In the comparatively rare cases where the employee rejects the allegations outright without giving adequate reasons, or refuses to cooperate, you, the employer, need to consider what action to take.

You may decide to issue the letter and give your employee time to cool down, or, if you really feel that nothing is going to change, give notice of termination under the Fair Work Act.

Again, whatever the outcome, you should make a written record of who said what. Give the employee a letter summarising the discussions between you and them, the reasons for the termination and the period of notice or the payment in lieu.