When Employees Go Rogue – Workplace Relations and Performance Management

It’s a classic case of the ripple effect – businesses that adopt and enact best practice in the workplace will, more often than not, experience a greater degree of employee engagement and performance. It goes without saying that the happier, more motivated, and more productive your employees are, the better the results your business will see and produce. And what business doesn’t want that?

That being said, unsatisfactory performance and unacceptable behaviour in the workplace is an unfortunate reality that is bound to be faced by most businesses at some point in time.

The Fair Work Ombudsman recommends that in order to combat such occurrences, all businesses should establish effective management systems. It is vital that these structures consider underperformance, and outline how the business proposes to deal with it.

Understanding and being prepared for underperformance will assist your business in rectifying the issue before it negatively impacts the entirety of your workplace.

What should I be looking out for?

The term “underperformance” captures an extensive range of unacceptable behaviour, including non-compliance with or contravention of workplace policies and work that is generally just not up to scratch.

It is important to note, however, that misconduct differs significantly from underperformance. Very serious behaviour, for example that of theft or assault, amounts to misconduct. Such behaviour can warrant instant dismissal. If misconduct occurs, it is recommended you seek legal advice regarding the specific situation, your options, and how to best handle the matter.

Establishing an effective management system

So, how do you establish an “effective management system”? The Fair Work Ombudsman suggests creating a procedure when it comes to dealing with underperformance:

  1. Firstly, it is essential to understand the reasoning behind the underperformance. Is the employee unclear about what is expected of them? Are the goals, standards and policies of the workplace ambiguous or non-existent? Does the employee require professional help due to any personal issues they are currently facing?Once the cause of the behaviour has been pinpointed, tailored mechanisms can be implemented to aid the specific case.
  1. Next, an assessment should take place regarding the degree of the underperformance.How serious is the problem? For how long has the employee been underperforming? How much improvement is required before the employee begins meeting your expectations?
  2. It’s at this point when your “people management” role will really kick into gear – at a private meeting with the employee to discuss the issue.

If you are hopeful about the employee’s position in your business and their potential for improvement, it is crucial that you make clear to them what the actual problem is, and why it is an issue. You should also explain how their behaviour is affecting the workplace, and why it is a concern for the business.

Once the employee is crystal clear about what is expected of them, where possible, solutions to the issue should be jointly devised between yourself and the employee.

An employee who has assisted in formulating an action plan is more likely to act upon it, in comparison to an employee who is simply told, “you need to improve”.


A resolution to the issue may consist of mapping out performance expectations, and matching up goals with these hopes. Time frames, strategies and possible training may be points for consideration too. Ultimately, you want to reinforce the key roles and responsibilities that the employee has, and emphasise the fact that their duties and performance play an important part within the business structure.

  1. Finally, monitor the performance of the employee.Organise monthly meetings, provide regular feedback, offer encouragement and set goals.

    Employee improvement makes for business improvement. Employee performance is business performance.

But nothing has changed…

You’ve tried the meetings. You’ve tried setting goals. You’ve tried being super encouraging but there are still no signs of improvement in sight. What now?

Termination of employment may be an option. It is important to note that employees cannot be dismissed in circumstances that are harsh, unjust or unreasonable. What constitutes this standard will depend on the circumstances of each case. Generally however, the Fair Work Commission will consider a dismissal fair in the following situations:

  1. there was a valid reason for the dismissal in regards to the employee’s capacity or conduct;
  2. the employee was informed of this reason and was provided an opportunity to respond;
  3. the employer provided the employee with the correct term of notice;
  4. the employee had previously been told that their performance was unsatisfactory;
  5. the employer had sound underperformance procedures in place and the steps of such had previously been carried out; and
  6. the employee was allowed a support person in any meetings held regarding their dismissal.

The Fair Work Commission will consider any other matters it deems relevant.

Getting it right

Unfairly dismissing an employee provides the employee and Fair Work Ombudsman with the power to take action against you. If it is found by the Fair Work Commission that you have breached the National Employment Standards, this action can come with hefty consequences – monetary penalties of up to $54,000 per contravention in fact! Therefore, it’s important to get it right. This means providing the employee with their entitlements – the correct term of notice and amount of final pay.


An employer does not need to provide notice of termination to the following employees:

  1. casual employees;
  2. an employee who is summarily dismissed due to serious misconduct;
  3. an employee who was employed for a specified period of time, for a specified season or for a specific task;
  4. an employee whose employment is limited to the duration of a training arrangement (other than an apprentice); and
  5. daily or weekly hire employees working in the construction or meat industries.

Where the employee does not fall under one of the above categories, an employer must provide the employee with written notice of their last day of employment. The amount of notice an employee is entitled to will depend on a range of factors. This includes whether your company has an award or agreement in place which outlines required terms of notice specific to your workplace. Generally, the following terms will apply:

  1. if the employee’s length of service is 1 year or less, they are entitled to 1 week notice;
  2. if length of service is longer than 1 year but less than 3 years, they are entitled to 2 weeks’ notice;
  3. if length of service is longer than 3 years however less than 5 years, the employee is entitled to 3 weeks’ notice; and
  4. if length of service is more than 5 years, the employee is entitled to at least 4 weeks’ notice.

In addition to these entitlements, if the employee is over 45 years old and has completed at least 2 years of service with the company, they are entitled to an additional 1 weeks’ notice.

Alternatively, an employer can choose to pay the employee in lieu of their notice of termination.

Final pay

When employment comes to an end, the employee is entitled to the following payments where applicable:

  1. outstanding wages and any owed remuneration;
  2. pay in lieu of notice of termination;
  3. pay for accrued annual leave;
  4. payments owed for long service leave; and
  5. payment for any accrued overtime that would have been taken as time off work.

Small business employers should refer to the Small Business Fair Dismissal Code when addressing employee entitlements and whether a dismissal is just and warranted.

By Jade Hovey, Paralegal, Atticus Lawyers & Advisors.

If you would like further information about anything discussed in this article, please contact our office on (03) 8692 7520.