for the past few years, employers were free to decide whether to keep or terminate a bad employee, but that has all changed with the WorkChoices Fair Work Act. The new regulations require businesses to honour their promises.Furthermore, where there were exceptions and exclusions, such as the number of employees on your payroll, those categories will no longer affect dismissal decisions. It’s really become a one-size-fits-all initiative.


Employers often have to deal with employees who are not necessarily malicious or disobedient, but who cannot perform the job to the satisfaction of the employer. The job market is full of anecdotes about employers who revised, reorganized, redesigned and restructured the workplace to accommodate an employee who seems unable to perform the simplest tasks. In such cases, the employer has a valid reason for dismissing the employee, but according to the Fair Work Act, a cause for dismissal must first be established, and the burden rests with the employer. One of the best ways to achieve this is by maintaining proper and comprehensive records.

So how can businesses protect themselves from unfair dismissal claims? By implementing 5 simple prerequisites for success;


The purpose of the appraisal is to explore the employee’s strengths and weaknesses. Appraisals are the nexus between the company’s needs and improved employee performance. This type of interview is critical because it points out performance deficiencies and a plan for remediation. Once the deficiency is identified, however, the remedial action should be agreed upon by both parties, and initiated. In the event there is no improvement, or the employee’s performance continues to deteriorate, managers have documentation to support their actions.

* Criteria for Writing Performance

Appraisals: Good performance objectives will address three characteristics: they are clear, simple and achievable. Many employers realize too late that the traditional performance appraisal forms do not fully meet those requirements. There are a number of leading cloud-based performance management systems such as Revuu that can increase the chance of success significantly.

Employee appraisals should include:

  • A clear statement of his or her performance targets;
  • Direction of the activities of the organization, a common point of discussion for the employee and his supervisor, and a clear statement of the agreement between them;
  • Goals and milestones for the entire organization, and a statement of performance objectives for all its officers.
  • Clearly defined goals for the employee. Begin with a strong action verbs like “reduce,” “increase,” “design,” “implement”. Avoid low action verbs like “ensure”, “help”, or “try”.


Management should have a complete, well-documented and confidential file for each employee. These documents should be included in the employee’s personnel file. Some of the documents would include:

  • A paper describing the performance throughout a given period of the performance review;
  • Documented facts that are objective and concern the tangible performance of the employee, as they occur; don’t rely on memory (including dates, times) or opinions;
  • Recorded behaviours at work, not after work or hearsay that happened outside of work;
  • Document observations made directly, rather than information given that is based on rumour;
  • Specific behaviours rather than descriptions of employee’s personality;
  • Detailed information that relates to the employee’s work history;
  • Any formal discussions held with the employee;
  • Facts and not opinions;
  • Actions that were taken;
  • Note new initiatives to improve the employee’s performance, and a description of the action plan and if it was effective;
  • Note the options examined when the employee’s performance does not improve.

Always make sure the employee’s personnel file includes information related to work, and do not criticize the employee based on a single gesture you deem undesirable. You always want to be fair and personnel files should exhibit this fairness.


According to the tribunal, employers cannot terminate a worker for misconduct, unless the misconduct has been repeated on one or more occasions, and the employer has given him or her appropriate warning letters.

A warning letter is really a low disciplinary action but it gives notice to the employee that they have not followed an employer’s policy. If the employee files an unfair dismissal case, you will need to challenge the nature of the dismissal, and warning letters will serve to prove the employee’s repeated violations; this will boost the merits of the dismissal. The allegations against the employee must be stated clearly detailing the circumstances in which they occurred, witnesses present, etc.

Finally, warning letters should note that first, it is a warning and, second, the measures to be taken by the employee. Any warning letter, even a poorly constructed one, will be considered if the content of the writing received by the employee highlights the problem and how it should be improved. Courts have even upheld that an email, if it highlights a fault and a warning, can be construed as a warning letter.


Many employers issue policy handbooks and manuals that list employee obligations. The best policies are specific to the workplace and are not borrowed from other backgrounds or written by outsiders.

What makes a policy effective? Company policies vary greatly in their form and content. Their style, however, is not as important as the clarity with which they describe the functional responsibilities and decision-making.

For a policy to be effective, it must:

  1. Show that senior management and representatives were involved in its drafting;
  2. Be consistent with the objectives of efficient and predictable operation of the workplace;
  3. Be relevant to the real needs of the workplace (it should not come from another workplace);
  4. Be considered as important as other policy objectives of the workplace.

Whichever way your company manual is written, a policy contains only empty words if there is no plan to implement it across the organization. Policies can protect you from unfair dismissal claims only if:

  • Responsibilities are clearly defined and assigned to each individual employee;
  • You have established accountability for your employees;
  • Management follows proper procedures that are implemented for all employees;
  • Employee responsibilities and objectives have been discussed, clarified and communicated.

Although the responsibilities must be established in a comprehensive manner and according to the type of work assigned, management should avoid being too specific and thus promote a legal interpretation of the policy.


Every employer should develop a workplace policy guided primarily by the employee’s execution of work. You want your employees to know and understand the rules, as well as establish examples of conduct that will not be tolerated. One of the best methods of making employees aware of the rules is by establishing terms and conditions of their specific employment.

All employers should establish that the work:

  • is performed according to a set of instructions;
  • involves the integration of the worker in the organization of the company;
  • is done according to a schedule specified or agreed by the person requesting the work.


Although a large number of behaviours can justify a dismissal, such as wilful misconduct, fraud, a breach of fiduciary duty, and insubordination, it is incompetence or poor performance that typically constitute grounds for dismissal.

These tend to be more difficult to justify. Claiming that an employee is gravely incompetent is only one of the factors the court will consider when deciding whether or not to confirm dismissal for cause.

Employers must also demonstrate that they have taken steps to document the alleged dissatisfaction in performance. The courts will want to be sure the employee was informed of these dissatisfactions, and an opportunity was given to correct the situation.


The most overlooked measures taken by employers are generally the simplest. Start by maintaining proper and comprehensive records: implement an effective management system that can seamlessly document all performance appraisals, warning letters and interviews. This will undoubtedly help if employees unjustly file unfair dismissal claims.

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Ann Cawkwell
Ann has worked in the automotive sector for over 20 years with a significant amount of time in dealerships in sales and F&I achieving outstanding results. She became a trainer for Toyota Financial Services and then joined Fusion as a trainer and performance management coach. Her extensive skills in selling and process make her an outstanding coach and facilitator.