How managing underperformance is key to solving Australia’s productivity problem

Written by: Guy Hargreaves, Senior HR Consultant – Humanify HR Consulting

In a recent Fair Work Commission decision regarding an application for unfair dismissal, 17 May 2024, JF Camenzuli vs Companion Systems Pty Ltd; Commissioner Hunt provided guidance for employers across a number of topics including:

• genuine redundancies and how they are defined;

• consultation requirements around redundancy;

• performance management and termination for unsatisfactory performance;

• the employee’s right to have a support person;

• the definition of serious misconduct; and

• the requirement to treat employees with dignity and respect.

In the Fair Work case cited above, the employer believed they had valid grounds to terminate for unsatisfactory performance.  However, it quickly became apparent that they had not followed any process that would justify such a decision.  In the decision, Commissioner Hunt was clear that an employee being dismissed for unsatisfactory performance must be given a warning, and that it is not a warning at law unless it satisfies the following:

“… The purpose of a warning about unsatisfactory performance must be to identify the performance that is of concern and must make it clear that a failure to heed the warning places the Applicant’s employment at risk. Such a warning gives an employee an opportunity to improve in those areas identified as requiring improvement.

An integral part of such a warning must be to clearly identify the areas of deficiency, 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.”

This guidance essentially provides a procedural outline of the necessary steps to manage the unsatisfactory performance and, if necessary, proceed to a dismissal. Simply put, an employer must ensure and be able to demonstrate that the employee:

• clearly understood where their job performance was not meeting the necessary standards;

• was offered the necessary assistance, training or support to remedy the situation;

• was provided with a reasonable period of time to achieve and sustain the necessary standard of performance; and

• was very clear that failure to achieve and sustain the necessary standard of performance could put their employment at risk.

The reality is that in practice, many managers are reluctant to commence formal performance management processes for fear of ‘getting it wrong’, being accused of bullying and/or harassment or having a claim made against them in the Fair Work Commission.  This reluctance on the part of managers can be understandable, and results in a lack of management that ultimately leads to low productivity.  It is important to remember that “reasonable management action conducted in a reasonable way” is not bullying.  The quickest way to kill team performance is to allow individuals to get away with unsatisfactory performance.

The Fair Work Commission lists the following as reasonable management actions:

• start performance management processes (such as a performance improvement plan)

• take disciplinary action for misconduct

• tell a worker about work performance that is not satisfactory

• tell a worker their behaviour at work is not appropriate

• ask a worker to perform reasonable duties as part of their job

• take action to maintain reasonable workplace standards.

Addressing underperformance is key to maintaining productivity, morale, and overall organisational health.  It ensures that issues are resolved before they escalate, helps with the development of employees, and ultimately contributes to the success and sustainability of your organisation.

Resolving Australia’s productivity problem is all about equipping managers with the capability to more effectively manage performance.  Ultimately, more productive workplaces benefit us all.

More information

Humanify HR Consulting works with Australian leaders and organisations to help them excel in Human Resources. Visit our website or contact us at hello@humanifyhr.com.au to see how we can work together.  To be the first to know about workplace relations updates and HR resources, you can subscribe to our mailing list here.