Dealing with disciplinary issues

This is the seventh part of a series of employment law articles by Whitehall Workplace Law discussing some of the legal and practical matters small businesses ought to consider in relation to the employment life cycle of an employee, that is, from the recruitment stage to the employee ceasing to be employed.  Part six of the series published on 13 September 2017 looked at how to avoid discrimination and adverse action claims. This piece looks at employee disciplinary issues.

What types of disciplinary issues typically arise?

Disciplinary issues can arise in connection with either performance or misconduct issues.  Sometimes, the issues are intertwined, but – to the extent possible – they should generally be managed by employers as separate matters.

Where an employee earns less than the high-income threshold (currently $142,000 per annum), or more than this amount but they are covered by a modern award or an enterprise agreement applies to them, they will (subject to some other qualifying criteria) be able to pursue an unfair dismissal claim pursuant to the Fair Work Act 2009 (Cth) (FW Act) if they are dismissed at the end of the disciplinary process.

In a nutshell, this requires employers to have a reason for the dismissal which is “sound, defensible or well founded”, have adopted a reasonable process and considered the particular employee’s circumstances.

Employers may also be bound by more prescriptive disciplinary and termination procedures in an enterprise agreement or sometimes (which can often be unwittingly) in their contracts of employment or policies.

In some cases, it may be appropriate to adopt a different process for employees not covered by the unfair dismissal jurisdiction under the FW Act or by any other disciplinary or termination procedure.

Performance issues

Performance issues generally arise where, despite the employee’s effort and willingness to succeed in the role, the level of performance simply does not meet the employer’s requirements.  It will generally be appropriate to provide the employee with some assistance and a reasonable period of time to improve in the role.  Employers can be unsure of how much time and effort should be spent helping an employee to improve. Of course, each case will “turn on its own facts”, but the cases do provide some helpful guidelines.

In the recent case of Etienne v FMG Personnel Services Pty Ltd [2017] FWCFB 3864 (13 October 2017) a Full Bench of the Fair Work Commission (FWC) found that in the circumstances of this case, it was inappropriate to terminate the employee’s employment just one week into a six week performance improvement plan (PIP).  However, the Full Bench said:

“…we would note that our decision should not be understood as suggesting that employers are always required to conclude a performance-improvement process once it has begun. There may be a valid reason not to do so. Each case will turn on its own facts”.

Misconduct

Misconduct relates to inappropriate or unacceptable behaviour.  In only very serious cases, misconduct can be categorised as “serious misconduct”, allowing an employer to terminate an employee’s employment summarily without notice or payment in lieu of notice.  It is a very high bar for an employer to establish grounds for serious misconduct.

Where concerns about employee misconduct arise, it will generally (depending on whether the FW Act unfair dismissal provisions apply and other relevant matters) be appropriate to provide the employee with an opportunity to respond to the employer’s concerns before any decision is made to terminate the employment.  In numerous cases, employers have been able to establish a valid reason for termination of employment based on misconduct but because of a rushed or inappropriate process, the dismissal has been found to be unfair.

Obtain all relevant information

Decision-makers should also ensure that they are aware of all relevant information before any decision to dismiss is made based on performance or misconduct issues.

Jeremy Cousins, Principal, Whitehall Workplace Law

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