For Employers: Possible to Terminate Employee Without Formal Warning?

Employment Law – Background

Recently, the Fair Work Commission refused an unfair dismissal claim by an employee who was terminated without receiving prior formal warnings.

The case demonstrates the flexibility of the Fair Work Commission in accepting an employer’s informal efforts to address workplace issues.

Facts

In essence:

  • in July 2015, the FMG Personnel Services (FMG) inventory controller and his manager discussed his work requirements for the next 12 months
  • it became evident the employee “lacked the necessary skills, capabilities and knowledge to adequately perform his role and that his manner and attitude to customers and internal personnel was unsatisfactory”
  • the manager believed the employee failed to grasp concepts required of his role or prioritise duties
  • the employee was alleged to have failed to comply with business processes. Furthermore, he was considered to be incapable of maintaining effective work relationships
  • from September 2015, a manager ‘informally’ performance managed the employee for a period of 10 months. In this period, the seating arrangement was changed to sit the employee next to the manager for daily coaching and individual training sessions
  • on one occasion, the manager conducted training for the entire team offsite despite the training being targeted only at the employee
  • in July 2016, FMG placed the employee on a performance improvement plan. Following this, the employee emailed HR denying any supposed performance issues
  • customers consequently eventually refused to communicate with the employee
  • consequently, the employee was dismissed in August 2016
  • the employee made a claim for unfair dismissal because he alleged there were no formal warnings, contemporaneous file notes or formal performance management

Fair Work Commission Decision

The Fair Work Commission:

  • held there was a “complete divergence” between the views of FMG and the employee
  • stated “…FMG sought to clearly communicate to [the inventory controller] what their performance expectations were and that FMG diligently endeavoured to assist [the inventory controller] to achieve these expectations”
  • considered FMG had reasonable grounds to conclude an informal approach was likely to be more successful
  • furthermore, accepted FMG had genuine and reasonable concerns about the employee’s ability to comprehend deficiencies in his performance. In addition, the employee believed training and coaching were “ordinary workplace conversations”
  • stated that such “exchanges were intended to be, and are properly characterised as, informal performance management”

The decision is available for you to read through the following hyperlink:

Mr Robert Etienne v FMG Personnel Services Pty Ltd [2017] FWC 1637 (25 May 2017)

Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • review this Fair Work Commission decision
  • seek the assistance of an employment lawyer to understand the impacts of this Fair Work Commission decision
  • raise any employment law questions with an employment lawyer
  • speak to an employment lawyer if you are concerned about performance issues of employees
  • still follow good HR practice when it comes to performance management

More Information

Please call the leading employment lawyers in Parramatta, the Matthews Folbigg Workplace Solutions employment law team, on 9635-7966 to speak with one of our employment lawyers.