By Nicola Martin (Principal) and Ethan Aitchison (Law Graduate) of McCabe Curwood.
Managing employee performance is often challenging for employers and HR professionals, and there can be instances where an employee’s performance can be so negligent that it can amount to misconduct.
In Steven Zirilli v StarTrack Express Pty Limited  FWC 3557, the Fair Work Commission (FWC) recently provided a reminder of the importance of distinguishing between poor performance and misconduct, and the consequences that may result from a failure to do so for the purpose of unfair dismissal proceedings.
The applicant was employed as a Bulk Fleet Supervisor from 1 December 2014. Between 2016 and 2017, the applicant agreed to perform additional duties on a relief basis. These duties included reviewing truck driver trip logs for compliance with the business’ internal safety and fatigue management policies.
Following an audit of driver trip logs, the applicant’s employer discovered that the applicant had erroneously signed off on 39 non-compliant trip logs as being compliant with relevant policies and legal requirements when this was not the case.
At a subsequent meeting to discuss the matter, the applicant claimed that he had not been provided with training relating to the correct procedure that he needed to follow in assessing trip logs. He also indicated that he wished to resolve the matter and continue in his employment.
His employment was subsequently terminated on the basis that he showed no understanding of the issues that had been raised with him, and gave no indication that he was prepared to work with StarTrack to ensure compliance going forward – rather, it was said, his focus in responding to the allegations put to him had been to blame others for his mistakes.
Following this, the matter proceeded to an unfair dismissal hearing before the FWC.
The distinction between poor performance and misconduct
Importantly, while the FWC considered that the applicant’s repeated failure to review trip logs in line with company policy had provided a valid reason for his termination, the FWC noted that the applicant’s errors were neither wilful nor deliberate and likely resulted from a lack of due diligence. Given this, the FWC considered that the applicant’s dismissal had been incorrectly characterised by his employer as an issue of misconduct rather than poor performance.
Because the applicant’s performance was the true basis relied upon by his employer to terminate his employment, the FWC considered that the applicant should have first been given a warning regarding the unsatisfactory nature of his performance prior to his dismissal.
On the basis that the applicant hadn’t been given an opportunity to improve his performance, even where he had indicated he was willing to try to resolve any issues with his performance, the FWC considered his dismissal both harsh and unreasonable and compensation was awarded.
This decision highlights the importance of properly distinguishing between employee under-performance and misconduct, particularly where this is likely to form the basis of an employee’s dismissal.
Employee misconduct is best characterised as behaviour by an employee which breaches the expected standards of behaviour, either as set out in policies or procedures or in the contract of employment. Do not confuse misconduct with serious or gross misconduct (which usually justifies termination without notice). The latter being wilful or deliberate conduct which causes serious and imminent risk to the health and safety of the employee or others, or otherwise poses a real risk of damaging the reputation or profitability of an employer’s business. It is conduct which goes to the root of the contract of employment and undermines it to such an extent as to make it incompatible with continuing the employment.
On the other hand, as this decision suggests, poor performance is best characterised as conduct which is neither wilful nor deliberate, but which does not meet an employer’s expectations. This can, however, extend to a failure to follow relevant procedures which may relate to work health and safety.
Where an employer considers an employee has been negligent or has breached a policy or procedure, the risk of mischaracterising an employee’s conduct for the purpose of dismissal is at its highest.
Consider whether it’s a case of ‘can’t’ as opposed to ‘won’t’.
Where an employee’s performance is in issue, employers should clearly establish an expectation of measurable improvement and ensure that opportunities are afforded to the employee to improve their performance in an objectively quantifiable manner with a clear timeframe for such improvement. Where the lines begin to blur between an employee’s poor performance and misconduct, this practice limits the extent to which any mischaracterisation of an employee’s conduct may occur.
This article was originally published on the McCabe Curwood website and has been reproduced with permission.