When an employee’s not delivering in the way we need them to, our thoughts tend to focus towards putting a structured management or improvement plan in place.  We’ll typically work out what we’re unhappy with, what we need them to be doing, and then we’ll meet with them.  During the meeting we’ll outline our concerns, let them know that we’re putting a formalised management or improvement plan in place, and hopefully we start moving forward.

Usually, these are all steps in the right direction, but before jumping in we need to develop a deeper understanding of what we’re dealing with, how we should be dealing with it, and being more nuanced in our language.

It’ll come as no surprise, but performance and conduct are different things.  Sometimes there can be overlap, but generally it should be clear what we’re dealing with.  For example, a salesperson not hitting their number is obviously a performance issue.  The same salesperson abusing a customer is a conduct issue.  Sometimes there can be overlap or confusion, for example where the salesperson’s interactions with the customer are a root cause of their lack of sales.

Understanding whether we’re dealing with a performance issue, a conduct issue, or both is important for at least two reasons.

Firstly, the criteria the Fair Work Commission must consider when determining whether a dismissal was unfair, differs depending on whether the dismissal was due to performance or conduct.  Specifically, in addition to the other statutory criteria:

• If the reason for the dismissal related to unsatisfactory performance, the FWC must consider whether the person was warned about the unsatisfactory performance before the dismissal (that is, whether the employee’s performance had been appropriately managed); whereas
• If the reason for the dismissal related to the employee’s conduct, the FWC must consider whether the employee was given an opportunity to respond to the reason.

In both circumstances, consideration will also be given to the proportionality of the dismissal to the reason, but there is not always a requirement to provide a warning before dismissing an employee for a conduct related matter.  And if we stop to think about that, it tends to make sense – would we give a warning to an employee that we’ve just proven to have fraudulently taken money from the company?

Secondly, where the conduct may not be serious enough to warrant dismissal, how we manage performance and conduct will often be different.  In summary, procedural fairness is important in both situations, but:

• With unsatisfactory performance, we’ll be working towards:
  • Clear communications around what’s not working, and what ‘good’ looks like;
  • Understanding the root causes of what’s not working;
  • A Performance Improvement Plan tied closely to addressing what’s not working, and moving to what ‘good’ looks like; and
  • Training and support to bridge any relevant skills gaps.
• On the other hand, with unsatisfactory conduct our focus is on:
  • Investigation;
  • Disciplinary actions, including a warning, re-training, apologies etc; and
  • Ensuring future expectations are clear and closely aligned to our workplace policies and the employment contract.

Mischaracterising or mis-labelling our concerns can also have unwanted consequences.  Undertaking a disciplinary process and issuing a termination letter where our communications consistently talk of unsatisfactory performance (but our concerns arise from inappropriate conduct), is at very least going to make the defence of an unfair dismissal claim even more difficult.  For example, the proposition will almost certainly be put as to why we didn’t issue a warning and manage the conduct further.  Similarly, if the employer was not themselves clear on whether it was a performance or conduct concern, how could the employee provide a properly considered response?  Similarly, mis-identifying a performance issue as unsatisfactory conduct is likely to risk us overlooking (or undervaluing) the importance of actively managing the employee, and providing clear and appropriate warnings.