Unfair dismissal; performance and warnings

Although the Fair Work Act does not expressly mandate that non small business employers may not dismiss employees on the grounds of performance in the absence of warnings, most members of the Fair Work Commission regard this as an almost non-negotiable requirement to avoid a finding of unfair dismissal.

“S. 387 (a) – Valid Reason for the Dismissal Related to Capacity or Conduct

The reasons for the dismissal of the applicant were stated by the employer in the termination of employment letter dated 22 November 2019. The termination of employment letter mentioned, inter alia, that the applicant had failed to adhere to the following obligations to the employer:

– Adhering to company policies and procedures

– Maintain your Strata agents’ licence or certificate of registration

– Meet Key Performance Indicators

– Failed to turn up to work at 8:30 am and left work at 3:30 pm on a regular basis without proper reason or client meetings scheduled in your calendar. Therefore, you attended personal events on company time.

Notwithstanding the lack of specificity in respect of the first and third reasons for dismissal that were mentioned in the termination of employment letter, any reason(s) for dismissal of the nature relied upon by the employer could only represent valid reason for dismissal if there was evidence that the applicant had been adequately warned that the conduct or performance in question may lead to dismissal if not rectified. The evidence has established that the matters that were relied upon as valid reasons for the dismissal of the applicant were not the subject of any clear warning and therefore could not represent sound, well-founded and defensible reasons for the dismissal of the applicant.

Conduct such as that which involved the applicant’s consistent late arrival at work could establish a valid reason for her dismissal only if there was evidence to establish that the applicant had been warned that if she continued to arrive late for work her employment may be terminated. The applicant asserted that the employer was aware of her need to start later than the stipulated commencement time of 8:30 am in order to take her son to school, and that she understood that the nature of her work would require a degree of flexibility such that the start and finish times that were stipulated in her employment contract would not be strictly observed. Importantly, there was no evidence that the applicant was given any indication that her timeliness in attending for work was a matter of concern to the employer. The following evidence provided by the applicant during her cross-examination relevantly summarised the circumstances:

“Would you say that the employer gave you plenty of opportunity to improve during the period and to turn up to work on time, and assisted you?— There was no discussions. There was no meetings to say that there was anything wrong with my work performance; there was nothing.” 1

Similarly, to be a valid reason for dismissal, any failure on the part of the applicant to meet reasonable key performance indicators would require evidence of warning that such failure might lead to dismissal unless performance improved. In this case, the absence of any evidence of warning regarding the performance and conduct issues that the employer subsequently relied upon as reasons for dismissal, has established that those reasons could not be sound, well-founded and defensible.

Consequently, the particular reasons relied upon by the employer for the applicant’s dismissal which involved her alleged inadequate performance and conduct matters such as her late arrival at work, could not represent valid reasons for her dismissal.”

Finch v Titles Strata Management Pty Ltd (2020) FWC 6565 delivered 9 December 2020 per Cambridge C