Dismissing Employees for Poor Performance

Process to be followed to minimise claims for unfair dismissal.

Many people are of the view there is a legal requirement that you have to give employees three written warnings before you are able to terminate them, commonly known as the ‘three strikes and you’re out’ rule.

There is no one hard and fast rule that needs to be followed when dealing with the termination of employees based on poor performance. The process needs to be fair and reasonable in the circumstances of each particular case. Whether or not a person undertakes a three written warnings process, it is up to the Court to determine whether the dismissal is harsh, unjust or unreasonable.

It is a question of undertaking the whole process in a fair and reasonable manner. Examples of the steps an employer can undertake which may assist in avoiding a successful claim by an employee for unfair dismissal are as follows:

1. Taking the following steps in relation to poor performance with the employee:

• Identifying and noting each specific incidence of poor performance.
• Meeting with the employee (and any support person if requested by the employee) and identifying the specific issues.
• Advising the employee the conduct or performance is not acceptable and that it will be monitored over a specified period of time.
• Warning the employee that the matter is serious and if performance is not improved, action may follow including possible termination of employment.
• Providing a written statement to the employee setting out the performance issues discussed and the remedial action the employee is expected to take.
• Monitoring the employee’s ongoing performance. The employee must be given an opportunity to improve their performance. This is a critical factor in any assessment of whether or not a dismissal is harsh, unjust or unreasonable in the context of an unfair dismissal claim.

2. If you feel the employment relationship is no longer tenable then you can terminate their employment.

3. Variables which may impact on the process to be followed in a particular case may include:

• The seriousness of the performance issues and the consequence of the performance issues to both the employee and the employer.
• The nature of the business.
• The tasks performed by the employee within the business.
• The length of time the employee has been employed.

It is important not to rush the process. The time allowed to an employee to improve performance is often a critical factor in assessing whether or not a dismissal is harsh, unjust or unreasonable.

For further information, contact our Commercial & Property Team