In a recent unfair dismissal claim heard at the Fair Work Commission, an employer came under fire for their lack of formal warnings and file notes regarding a dismissed underperforming employee. However, employers can breathe a sigh of relief as the Commission found that employers need not formally warn employees about unsatisfactory performance. Rather, evidence of a performance improvement plan, informal mentoring and general discussions about the dissatisfaction with the employee’s performance, was enough to warrant as warning to the employee.

In this case, an inventory controller was sacked by his employer, FMG Personnel Services (FMG), as he lacked the necessary skills, capabilities and knowledge to adequately perform his role. In an attempt to assist the employee, FMG decided to provide one-on-one informal coaching and even organised offsite training for the entire team – even though the training was targeted specifically for the underperforming employee. However, the employee failed to improve his performance and even started to become increasingly sensitive to constructive criticism.

Due to this, he was placed on an informal performance improvement plan, where a meeting took place between FMG and the employee to discuss performance expectations and ways to achieve them. The Deputy President accepted that FMG chose an informal method of performance management because it believed this was the most effective method of improving the employee’s performance.

What this means for employers

It is useful (and recommended) to conduct performance management in a formal and documented manner. However, failure to show this will not necessarily be detrimental to an employer’s case. If the employer can show the employee had significant performance deficiencies, which were communicated to the employee and that the employee was given avenues for improvement, termination of employment may be found reasonable.

Mr Robert Etienne v FMG Personnel Services Pty Ltd [2017] FWC 1637

Please note: This decision was recently appealed by the employee. We will provide further updates as they arise.