Disciplinary action and performance management

A. Introduction

As an employer, you will be faced from time to time with the problem of an employee who is not performing to a standard required by you. How can you address this issue with the employee? What steps do you need to undertake before any termination of employment is likely to be regarded as fair?

Alternatively, you may be faced with a situation where an incident has occurred where you think the employee concerned has acted improperly. For example, the employee might have become involved in a fight or provided fraudulent documents. How should you approach this situation?

It follows that there are two major categories of conduct which are the subject of performance management or disciplinary action (which may include termination of employment):

  1. Performance related conduct; and
  2. Inappropriate conduct or misconduct.


B. Poor performance

Apart from issues of misconduct, the usual reason for wishing to terminate an employee’s employment is that they are not performing their job to the employer’s satisfaction. Proper consideration must be given by the employer to the issue of whether the employer has done everything reasonably in their power to assist the employee to meet these expectations:

  • There should be a clear position description;
  • Clear goals and achievement timeframes should be established which are reasonable;
  • Performance should be regularly reviewed using a performance review/appraisal process which helps the employee to understand which areas they are doing well and which areas they are not doing so well and provide opportunities for training and improvement;
  • If, after a reasonable time, the employee’s performance still does not meet expectations, then it is possibly time to seek expert external advice on your position before going further;
  • The usual next step is to develop a more detailed plan for the employee and advise that if their employment does not improve to the expected benchmarks within a certain reasonable period of time, their employment may be terminated;
  • This cycle should be repeated, with a shorter time frame in place;
  • If at the end of this process, the employee’s performance has not improved to the expected standard, then their employment may be terminated on the appropriate notice.

Most performance related disciplinary action has its roots in a lack of communication and guidance. Often, an employee’s performance will not improve unless the employer takes a proactive stance towards helping the employee. Consequently, termination of employment is often an inevitable outcome of the absence of any form of performance appraisal or management, whether by the employee resigning or the employer sacking the employee.

It is important that any terminations be both substantively and procedurally fair (as well as not being for an invalid reason, discriminatory or in breach of an employee’s workplace rights). The process set out above is neither simple nor easy but is the only way that the danger of a claim can be minimised. Detailed notes of conversations and copies of letters must be kept.

It involves a process of:

  • Identifying the performance gap – the performance appraisal process is one way in which this occurs;
  • Identifying the causes of the performance deficiencies;
  • Making a decision whether it is possible to close the performance deficiency; and
  • Developing and implementing a strategy to close the gap.

Possible options for improving performance include:

  • Positive reinforcement programs that seek to identify and clarify the desired behaviours and provide rewards and recognition for this behaviour provided by the supervisor;
  • Training, development and learning programs that are designed to deal with the particular lack of skill or knowledge;
  • Employee assistance programs that are designed to assist employees with their personal and non-work problems;
  • Work/life balance programs that are designed to assist employees with their work and non-work responsibilities;
  • Employee counselling that is designed to focus on problem solving and goal setting. It requires that the employee is aware of the problem, the organisation’s standards and the reasons for the poor performance are explained. Necessary actions designed to improve the performance are discussed and agreed on and the discussions with the employee are documented;
  • Negative behavioural strategies or disciplinary action are useful in situations when it is critical for the employee to be aware of their poor performance and when it is important to signal to other employees the standards of expected behaviour.

These comments are of a general nature and the nuts and bolts of performance management are properly the province of the human resources professional. We can provide you with appropriate referrals.

C. Misconduct

Misconduct commonly takes the form of breach of organisation policies and procedures. Gross misconduct commonly involves dishonesty or fraudulent behaviour or other criminal conduct, for example:

  • Fighting in the workplace;
  • Failure to comply with safety requirements;
  • Sexual harassment;
  • Drunkenness or drug use – if capacity to perform services is impaired and/or there have been previous warnings;
  • Failure to perform services with no reasonable explanation;
  • Insolent or abusive behaviour in extreme or repeated instances;
  • False representation of qualifications.

In these situations, an investigation process should normally take place and the employee should be allowed to respond to the allegations against them before a determination is made about their conduct and the potential penalty.

A good investigation should include the following:

  • The organisation should have clear policies about acceptable behaviour;
  • It is necessary to act promptly on learning about a matter that may amount to misconduct;
  • The employer should investigate the allegation to determine whether there is any basis to the allegation, whether there is any reasonable explanation for it, and whether remedial action is required or disciplinary action is appropriate;
  • It may be appropriate to suspend the employee whilst the investigation takes place depending on the seriousness of the allegations;
  • The investigation should be carried out by someone who is not connected with the subject matter of the investigation (preferably a member of human resources or management or an independent human resources professional);
  • All relevant witnesses should be interviewed and relevant documents gathered;
  • The employee should be allowed to have reasonably representation, if requested;
  • The allegations should be put to the employee in detail and the employee allowed to respond;
  • Detailed written records need to be kept.

Once a determination about the allegation is made, there then needs to be a consideration of appropriate penalty and the employee should be given a further opportunity to respond on the issue of penalty before a final determination is made. Possible outcomes may include:

  • Counselling the employee;
  • Warnings; and
  • Termination, either on notice or immediate

The type of investigation, its detail and the subsequent allegation, response and decision process very much depend on the type of allegation and its seriousness. Any process must be substantively and procedurally fair and it is important for the employer not to prejudge matters. A decision maker must be satisfied of the requisite matters on the balance of probabilities. Procedural fairness involves:

  • All parties to a decision having the opportunity to be heard and all relevant arguments being considered before a decision is made;
  • People having an opportunity to present their view and respond to any adverse material before decisions are made affecting them;
  • A presumption of innocence, i.e, a person being innocent until proven guilty;
  • Decision makers acting fairly without actual or perceived bias; and
  • Decision makers acting on the basis of all relevant facts.

In practice, it is often necessary for some practical balance to be achieved depending on the severity of the matter and the possible consequences. Common mistakes in investigations are:

  • Resorting to investigation when conciliation/mediation is appropriate;
  • Taking too long to initiate an investigation;
  • Taking too long to advise the respondent;
  • Failing to put all or specific allegations to the respondent;
  • Failing to allow adequate representation;
  • Not taking a specific complaint from the complainant;
  • Failing to interview the complainant;
  • Not allowing the respondent time to consider the allegations and rebut;
  • Not allowing information given in confidence to be rebutted by the respondent; and
  • Failure to act consistently in comparison to previous occurrences of the conduct.

IT PAYS TO BE PROCEDURALLY FAIR (in all cases but particularly where misconduct is involved!)

Robert Kitchin and National Fleet Network Pty Ltd

One of the keys to avoiding claims of unfair dismissal is to ensure that dismissals are procedurally fair (as well as having a substantive basis). This case is a good example of the steps which can be undertaken to minimise the risk of claims being made because of poor investigations or failure to provide employees with an adequate opportunity to respond to allegations. The allegation was that the employee had been fighting in the workplace and was the instigator of the fight.

The employer had laid the groundwork for terminating the employee’s employment by:

  • Establishing Corporate Conduct Guidelines which set out a clear policy of prohibition of workplace violence, verbal and non-verbal threats including fights;
  • Getting the employee to sign a contract of employment containing a reference to company policies;
  • Conducting and keeping records of a presentation explaining the Corporate Conduct Guidelines which had been attended by the employee, “toolbox” meetings at which the guidelines were discussed and formally acknowledged by the employee.

The process undertaken by the employer before dismissing the employee was:

  • The applicant was stood down on full pay while the employer conducted its investigation;
  • The employer undertook interviews with all witnesses and took statements from them.
  • The applicant was asked to provide a written statement outlining his version of events and was interviewed about the incident. He was provided with an interview worksheet and asked to put forward extenuating circumstances if they existed. The applicant was asked what had provoked the incident; why he had reacted as he had done and whether any other incidents had occurred previously.

The documentary evidence demonstrated the relevant managers kept an open mind and considered various options before dismissal. Before the employee was dismissed, he was again interviewed and told that the employer was considering whether he should be dismissed and asked to provide any relevant information. The applicant was also given the opportunity to be assisted in both interviews.

The employee’s application for reinstatement/compensation was dismissed by the QIRC. The Commission stated that it does not expect employers to have the skills of police investigators or lawyers. But it is important that the employee is given a “fair go”. While this case is one involving misconduct, the principles apply generally to terminations of employment. Proper and practical procedures will go a long way towards minimising unfair dismissal claims and resolving any claims that are made.

Prior to taking disciplinary action, it is recommended that employers consider the following issues:

  • Was the employee aware of the performance standards or the policy?
  • Was the grievance or performance issue raised as soon as it arose?
  • Was the employee given an opportunity to respond to the allegation of misconduct or poor performance?
  • Was the employee’s response considered before any disciplinary action was taken?
  • Was the employee given an appropriate opportunity to improve performance prior to disciplinary action being taken?
  • Was the suspension of the employee on pay necessary to properly investigate the performance or conduct issue in the absence of the employee?
  • Was the employee given sufficient information to enable the employee to respond to the performance issue or allegation?
  • Was the employee given sufficient time to prepare a response?
  • Have all relevant witnesses been interviewed?
  • Have any issues raised by the employee in the employee’s defence been properly explored?
  • Is there a valid reason for termination or disciplinary action of the employee which is supported by evidence?
  • Has the employee had the opportunity to respond to both the reasons for the termination or disciplinary action, and to the decision of the employer as to the action to be taken?