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Perfect performance management wins unfair dismissal

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Dealing with an employee’s performance issues can be challenging for employers, however an extensive and thorough performance management process will make any dismissal defensible.

4 September 2020 by Nina Hoang and Jewlia Holt

For any unfair dismissal, the Fair Work Commission consider the following factors under section 387 of the Fair Work Act 2009 (Cth) (Act) as to whether a dismissal is harsh:

  1. whether there was a valid reason;
  2. whether the person was notified of that reason;
  3. whether the person was given an opportunity to respond to any reason;
  4. any unreasonable refusal for a support person;
  5. whether the person had been warned about that unsatisfactory performance before the dismissal;
  6. the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal;
  7. 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
  8. any other matters that the FWC considers relevant.

Performance issues must always be managed with procedural fairness or any dismissal will automatically be deemed harsh under sections 387(b),(c), (d) and (e) of the Act. In the case of Frederikus Hogendorn v Nokia Solutions and Network, the FWC endorsed Nokia for its performance improvement process and was satisfied that the dismissal of Mr Hogendorn was not harsh, unjust or unreasonable.

Mr Hogendorn was dismissed at Nokia on 11 January 2020 after a series of misconduct and performance issues between 2018 and early 2020, including:

  • performing work without the client’s approval;
  • sleeping in his office;
  • insulting the language skills of other employees; and
  • playing games on his phone.

In September 2018 Mr Hogendorn was issued with a first written warning letter. After multiple further complaints from customers and staff regarding his performance, Mr Hogendorn was put on a Performance Improvement Plan (PIP) in October 2019. Mr Hogendorn failed to meet the PIP requirements. The final nail in the coffin was after investigations determined he had completed work without a client’s permission and Mr Hogendorn was terminated.

In particular, Commissioner Hunt took note of the following when deciding the dismissal was not unfair:

  • Serious misconduct in completing unauthorised work;
  • Significant amount of time the Nokia gave Mr Hogendorn to improve his performance and address his conduct issues;
  • Mr Hogendorn had substantial number of warnings; and
  • He also did not manage to improve despite the PIP.

Lessons

  1. Performance improvement processes need to comply with procedural fairness.
  2. Ensure strong communication with the employee who is undergoing the performance management process, you should always check in with your employees and assist them to improve where you can.
  3. PIPs are a great tool to manage employees, as it allows employers and employees to work together to improve the employee’s performance. More importantly they are great evidence of the employer’s genuine attempts of performance management and are great evidence to defend an unfair dismissal claim.