Dismissal was justified but process was too abrupt

By Mike Toten Freelance Writer

A Reserve Bank manager employed for 14 years was justifiably dismissed for unsatisfactory job performance. However, the Bank handled the process too abruptly and without warning, resulting in the Fair Work Commission (FWC) ordering it to pay him compensation.

Facts of case

The FWC described the employee’s work environment as “complex and difficult to navigate”. In his final 30 months, he had three different managers. As a result, feedback presented to his managers by other stakeholders was often negative, and the managers tended to pass it on to the employee. The feedback was often in the form of suggestions that he put more effort into pleasing those stakeholders and take a less conservative approach towards his job, so that the feedback provided by the stakeholders would improve.

(The judgment sets out the feedback provided to the employee in considerable detail.)

As a result, they developed a Performance Improvement Plan for the employee. Despite the Plan, job performance continued to be below the managers’ expectations. However, they did not communicate that view to him, telling him midway through the review process that his performance was improving and his job was secure. 

However, instead of the scheduled final review of the Plan, the Bank went straight to a “show cause” process. Then, despite the employee’s response to the “show cause” stage and his subsequent taking of leave, it dismissed him in writing without further procedure. The termination letter did not specify his performance shortcomings.

Decision

The FWC described the dismissal process as “unnecessarily abrupt”. Given his 14 years of employment and generally good performance ratings before commencing work for the last two managers, it was also an undignified way to treat him. Plus, given the mid-term review of his performance improvement plan, he had no reason to believe that his employment would not continue. However, unsatisfactory performance was still a valid reason to dismiss him.

The FWC awarded him compensation of $6,000, making the assumption that his employment would have lasted eight weeks longer if the process had been handled fairly. He had obtained other employment soon after.

What this means for employers

This case is another example of an employer having a valid reason to dismiss an employee but being ordered to pay compensation because it handled the process too hastily and expediently. 

Feedback on job performance needs to be specific, preferably using actual on-the-job examples. When an employee responds to a “show cause” ultimatum, his/her response needs to be considered seriously before making any decision.

Read the judgment

Robert McLean v Reserve Bank of Australia [2024] FWC 2269 (24 August 2024)