In an ironic turn of events, a poorly implemented and followed performance improvement plan (PIP) resulted in an employer having to pay A$205,342 to an employee who had brought a successful adverse action claim in the Federal Circuit Court.


For more than 10 years, Mr Pezzimenti was an office manager at Rotary International. He was dismissed in June 2017 for alleged poor performance and subsequently commenced adverse action proceedings against Rotary.

In October 2016 Pezzimenti was placed on a PIP for a four-month period. During the PIP, Pezzimenti made a formal bullying and harassment complaint against his supervisor, who had placed him on the PIP. The complaint alleged that the PIP was not being properly implemented and was a sham to terminate his employment.

On 15 March 2017, after a series of discussions regarding the PIP – including one where Pezzimenti's supervisor said to him "Frank you didn't need to go to the extent of putting in a bullying complaint against me" – Pezzimenti was told that one item of the PIP was still outstanding.

On 27 March 2017 Pezzimenti completed the final requirement of the PIP and later provided his supervisor with a document which identified his achievements against each of the four deliverables of the PIP.

However, Pezzimenti's supervisor ultimately found that he had failed to meet the deliverables of the PIP and he was consequently suspended.

On 11 April 2017 Pezzimenti commenced proceedings seeking to restrain Rotary from dismissing him. Following the commencement of proceedings, Pezzimenti's supervisor and Rotary's HR director reviewed his leave records and email account and issued him with a show cause letter. Rotary asked Pezzimenti to show cause why his employment should not be terminated for reasons including:

  • inaccuracy in his leave records;
  • breaching confidence in an email; and
  • failing to meet the standards expected in the PIP.

When Pezzimenti failed to attend the show cause meeting, his employment was terminated.


Pezzimenti filed an adverse action claim, seeking relief against Rotary. While Pezzimenti originally sought relief to restrain Rotary from dismissing him, he did not move on this relief. The claim alleged, among other things, that Rotary had taken adverse action against Pezzimenti because he had made a bullying complaint against his supervisor.

Unsurprisingly, Rotary argued that while Pezzimenti had been threatened with dismissal, this was not because he had made the complaint, but rather because of his unsatisfactory progress under the PIP, his breaches of confidence and his failure to comply with the show cause letter.

In his decision, Judge Driver observed that:

  • while Rotary's issues with Pezzimenti had some substance and the PIP was justified, at least in the form in which it was originally conceived, "the goalposts of the PIP themselves changed… It was as if Mr Pezzimenti was from that point, set up to fail";
  • after the initial process of the PIP, Rotary had gone looking for additional reasons to dismiss Pezzimenti, including reviewing his leave records to find out if he had been absent from work without proper authorisation. Driver held that this had an "air of artificiality to it"; and
  • it was significant that three individuals were responsible for the dismissal and not all of them had been called to give evidence.

Driver held that Rotary had contravened the general provisions under the Fair Work Act 2009. Rotary was ordered to pay A$205,342 in compensation, being equivalent to his annual salary.

Practical tips

In order to avoid a PIP resulting in an adverse action claim, employers should:

  • arrange a face-to-face meeting with the employee who may be put on a PIP and offer them the assistance of a support person;
  • explain, where appropriate, the issues that they have with the employee's performance or conduct;
  • formulate a set of definite objectives that the employee must achieve over a set period. An assessment period will make it realistic for the employee to achieve such objectives. The employee's input should be sought on the objectives and only objectives that are achievable within the PIP assessment period should be set;
  • finalise the PIP and ensure that the parties sign a copy of the minutes or a summary of the meeting and keep a copy on file for their records;
  • regularly monitor the employee's progress over the assessment period;
  • provide the employee with support, as required, throughout the assessment period;
  • meet again with the employee at the end of the assessment period and determine whether the performance or conduct objectives have been achieved. If this is coupled with an adequate organisational support structure, employers will ensure that the employee has the best chance of improving their performance and conduct; and
  • limit the number of individuals making a decision with respect to an employee and a PIP, as all decision makers may be required to give evidence in any legal proceedings.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.