Unfair Performance Management

Many companies commence a performance management plan after already deciding to remove an employee. Employers see performance management or improvement plans as a way to establish a valid reason for dismissal, where the employee does not meet the requirements of the plan. The plan also can assist the company in meeting the requirements of procedural fairness under Section 387 of the Fair Work Act 2009 (Cth).

Section 387 states that in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Fair Work Commission must take into account:

  • whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees);
  • whether the person was notified of that reason;
  • whether the person was allowed to respond to any reason related to the capacity or conduct of the person;
  • any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal;
  • if the dismissal related to unsatisfactory performance by the person–whether the person had been warned about that unsatisfactory performance before the dismissal;
  • the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal;
  • the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
  • any other matters that the FWC considers relevant

Many employees might find the performance management plan to be unrealistic or uncalled for. For them, it will be a signal to start looking for another job while they still have a job.

If it is genuine the employee should be proactive in ensuring that they understand the plan and engage with it positively. The plan might be based on a misunderstanding of the employees’ role by a new manager so rapport needs to be established with that person. McDonald Murholme provides advice on how this can best be done and how the job can be retained.

In most cases, we find that the performance management plan is a termination plan. This is especially the case where an employee has exercised workplace rights, been with the company for many years, or has returned from maternity or personal leave.

It is foolish for an employee to let the employer implement a termination plan disguised by a dysfunctional performance improvement plan. To do so empowers the employer to later rely upon the plan as if it were legitimate, where it may not have been. It is especially difficult for an employee to challenge a completed plan at the time of termination. It is often seen that the employee accepted the plan but couldn’t meet the requirements so there is no evidence to challenge the basis of termination.

McDonald Murholme will assist employees by intervening early to prevent a performance management plan escalating into an unfair termination. While the work to be done is difficult, and employees are often nervous and uncertain of what to do, there is no substitute for sound legal advice from an experienced employment lawyer. It is too much to expect that a free government agency or legal service can assist an employee to navigate such a serious problem which can take months of constant, regular and strategic advice.’

Our clients' satisfaction is pivotal to our own success.

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    I couldn't recommend the team from McDonald Murholme more. Mr Sam Nottle was efficient, professional and achieved a wonderful result. If you are questioning whether to go ahead with an employment matter legally, I would urge you to do so. The team at McDonald Murholme made the process easy & reduced all of my anxiety and stress. Thank you again, Mr Nottle & team, I can't express my appreciation enough.
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  • May 2020

    I found Arthur Hambas & Katherine Boyles extremely professional & compassionate in my dealings with them. After telling Arthur that I felt the details surrounding my redundancy felt wrong he took on my case & secured me a better payout from my employer. I would not hesitate to recommend Mcdonald Murholme to anyone that has a feeling that something isn't quite right. I greatly appreciate everything you did.
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    The solicitors at the firm were very prompt and actioned my complaint against my employer very quickly. I obtained the result I wanted, in fact, I got a better result than what I had originally asked for. I was very pleased with the results and would highly recommend McDonald Murholme.
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    I would like to say that McDonald Murholme have treated me with nothing but professionalism and also great service. Trent, a principal in the firm is attentive to your needs and will ensure your case is handled with care and mindful consideration to all parameters involved.

Frequently asked performance management questions

What is performance management?

Performance management processes, such as Performance Improvement Plans (PIP), are put in place to allow employees to improve their performance over a specified period.
The Fair Work Ombudsman provides a guide for managing underperformance which includes the following steps for employers:

  1. Identify the problem;
  2. Assess and analyse the problem: you should be advised of a meeting ahead of time to allow you to prepare and to organise a support person or union representative to be present;
  3. Meet with the employee to discuss the problem: you should walk away from a meeting understanding ‘what the problem is, why it is a problem, how it impacts on the workplace, and why there is a concern’;
  4. Jointly devise a solution: ‘where possible, a solution must be jointly devised with the employee; and
  5. Monitor performance

What should I do if I have been placed on a PIP with unachievable targets?

A PIP should clearly outline the areas where you need to improve, a timeframe for improvement and steps you can take to get there. If you believe the expectations set through the PIP are unreasonable, you have the right to make a complaint or inquiry concerning your employment. Making a complaint or inquiry is considered a protected workplace right, this means it is unlawful for your employer to take adverse action against you for exercising your workplace right.

I have been set unreasonable KPIs, what can I do?

KPIs should not be set in a way that ensures an employee can never meet their targets.

Under section 341 (1) (c) of the Fair Work Act 2009 (Cth), you have the right to make a complaint or inquiry concerning your employment. Therefore, if you believe that you have been set unreasonable KPIs, you have the right to inquire and request for a revaluation of the set targets. Good KPIs need to be S.M.A.R.T, in that they should be Specific, Measurable, Attainable, Relevant and Time-bound. Therefore, you should assess your current KPIs against the KPIs for the previous periods and your colleagues in similar roles, and show that your KPIs have been stretched too far. Further, you can request regular reviews to gain feedback on your performance and direction as to how to achieve unreasonable targets.

I have been given a warning letter I do not agree with. Do I have to sign it?

You are not required to sign a warning letter and you should not do so if you consider the warning to be unjust or unreasonable.

I have been given a warning letter unfairly, how do I contest it?

You should write a letter disputing the basis of the warning and include your version of the specific events and if possible highlight that your conduct was in keeping with company policy.

Under section 387(c) of the Fair Work Act 2009 (Cth), an employee must be given the opportunity to respond to any warnings related to their conduct or capacity.

You should also review your employee handbook for any possible dispute resolution procedures and give your letter of dispute to your immediate supervisor and/or HR Manager.

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