Manage the underperformance of an employee

We will help you put in place a performance improvement process that is fair, properly documented, and legally defensible.

An employee who is not performing to the standard their role requires is a problem that rarely resolves itself. Left unaddressed, underperformance becomes entrenched, affects the rest of the team, and eventually puts you in a position where you are managing a situation that should have been dealt with months earlier. The process you follow matters as much as the underlying performance issue, and an employer who moves too quickly or without proper documentation risks an unfair dismissal claim even where the performance concerns are genuine. We help you build a performance management process that gives the employee a real opportunity to improve and gives your business a defensible record if termination ultimately becomes necessary.

How do I manage the underperformance of an employee?

Performance management is the process by which an employer identifies that an employee is not meeting the required standard and takes structured steps to address that gap. A performance improvement plan (PIP) is a documented framework that sets out what improvement is required, over what timeframe, and what support the employer will provide. Getting the process right matters because the Fair Work Act 2009 (Cth) imposes procedural obligations on employers who are considering termination on performance grounds, and an employer who terminates without following a sound process risks an unfair dismissal finding even where the performance issues were genuine and well-founded.

What should a performance improvement plan include?

A performance improvement plan should set out the specific performance issues identified, what improvement is required and by when, what support the employer will provide to assist the employee, and what the consequences will be if the required standard is not reached. A well-structured PIP under the Fair Work Act 2009 (Cth) gives the employee a genuine opportunity to improve while creating the documented record the employer needs if termination ultimately becomes necessary. We advise on what a PIP for your specific situation should include and assist in preparing it.

What happens if the employee does not improve after the PIP?

If an employee does not meet the required standard by the end of the performance improvement period, the employer may have grounds to terminate on performance grounds, provided the process was procedurally sound and the employee had a genuine opportunity to respond and improve. Before terminating, the employer should obtain legal advice to ensure the process completed supports a lawful termination and that the risk of an unfair dismissal claim is minimised. We advise on whether the process completed supports termination and what the next steps should be.

Can an employee claim unfair dismissal if terminated for poor performance?

An employee dismissed for poor performance can make an unfair dismissal application under the Fair Work Act 2009 (Cth) if they meet the eligibility criteria, including a minimum employment period and an earnings threshold. The Fair Work Commission will assess whether there was a valid reason for dismissal and whether the employer followed a fair process before terminating. A well-documented performance improvement process significantly reduces the employer’s exposure to an unfair dismissal finding.

Do I need to give a warning before terminating for poor performance?

The Fair Work Act 2009 (Cth) does not prescribe a fixed number of warnings before termination for poor performance, but the Fair Work Commission expects that the employee will have been given a clear opportunity to understand the issues, respond to them, and improve before termination is considered. In practice this usually means formal performance discussions, a documented improvement plan, and a reasonable improvement period. We advise on what a procedurally sound process looks like for your specific situation.

A documented process that holds up to scrutiny.

Clear benchmarks that give the employee a genuine opportunity to improve.

Legal advice before termination so you know where you stand.

A poorly managed performance process creates more problems than the performance issue itself.

Employers who handle underperformance without a clear process frequently find themselves managing an unfair dismissal claim instead of a performance issue. Getting the process right from the first documented conversation is the most effective way to protect your business and give the employee a genuine opportunity to meet the standard.

Underperformance that is not addressed with a proper process becomes your legal problem, not just a management one.

You have an employee who is not meeting the standard their role requires, and you want to address it in a way that is fair and protects your business. The challenge is that the process you follow matters as much as the underlying performance issue, and an employer who moves too quickly or without proper documentation risks an unfair dismissal claim even when the performance concerns are genuine. The pressure to act is real, but so is the cost of acting without a defensible process behind you.

We will advise on what a lawful performance management process looks like for the specific circumstances and role.
We will help you prepare a performance improvement plan with clear benchmarks, a reasonable timeframe, and the support the employer will provide.
We will advise on how to conduct and document performance discussions with the employee.
We will assess whether the process completed supports a lawful termination if the employee does not meet the required standard.

You know this employee is not performing, but every step you take to address it feels like a step toward a claim.

You have a team member who is not meeting the standard the role requires, and informal attempts to address it have not worked. You want to deal with it properly, but you are aware that moving without a structured process could expose you to an unfair dismissal claim even where the performance issues are clear. The performance problem is visible to everyone around you, but without a documented and procedurally sound process behind you, your position is more exposed than it should be. What you need is a process that lets you act decisively and defend that decision if it is challenged.

What's included in your performance management and PIP service

Performance improvement plan preparation.
Performance discussion guidance and documentation advice.
Process compliance assessment under applicable employment legislation.
Termination advice following a completed PIP process.
Unfair dismissal risk assessment before any action is taken.

What happens when underperformance is managed without a proper process?

Employers who manage underperformance informally and without documentation regularly find themselves on the wrong side of a Fair Work Commission hearing when they finally decide to terminate. The employee’s account of the performance management process will differ from the employer’s, and without documented evidence of warnings, performance discussions, and a structured improvement plan, the Commission may find that the termination was unfair even where the underlying issues were real. The costs of that finding include compensation to the employee, potential reinstatement orders, and the management time absorbed by the Commission process itself. The longer a performance issue is managed informally, the harder it becomes to demonstrate that a sound process was followed when the time comes to act.

Here is how we help you manage underperformance correctly and protect your business.

We help you build a performance management process from the first documented conversation that will hold up to scrutiny if it is later challenged. We advise on how to structure the PIP, what benchmarks to set, and how to conduct performance discussions that give the employee a genuine opportunity to respond and improve. If the employee does not meet the required standard, we assess whether the process completed supports a lawful termination and advise on the steps needed to minimise the risk of a successful claim. Employers who follow a well-structured process are in a significantly stronger position at every stage, including when they need to make the final decision.

Three steps to managing underperformance lawfully and with confidence.

Process documented, improvement planned, decision supported.

Define the standard.

We advise on how to document the performance issues clearly and prepare a PIP with measurable benchmarks, a realistic timeframe, and the support the employer will provide.

Run the process.

We advise on how to conduct performance discussions, document the employee's responses, and maintain the records that demonstrate a fair and procedurally sound process.

Advise on the outcome.

If the employee does not improve, we assess whether the process supports a lawful termination and advise on the steps needed to minimise your exposure.

Employment lawyers with over 25 years of experience advising employers on performance management, workplace investigations, and Fair Work Commission proceedings.

Managing an underperforming employee is one of the most draining things a business owner faces. You are trying to be fair to the individual, protect the rest of your team, and keep your business running, all at the same time. Our employment lawyers have advised employers through hundreds of performance management processes and the claims that follow when they go wrong, across industries from professional services to construction, retail, and healthcare. We understand that the goal is not just to follow a legal checklist but to resolve the performance issue in a way that is fair, proportionate, and leaves your business in a stronger position.

We understand you want to know the cost, before we get started.

We will map out our process, from beginning to end, so you know what the journey will look like before you get started.

We will provide you with a clear and detailed Work Proposal covering each step along the way.

Our fair fees are all-inclusive. No hidden costs for telephone calls, emails, photocopying, couriers, or coffee.

Our great lawyer guarantee

We want to be part of your team over the long term. We achieve this by adhering to these core principles:

Take the time

We listen carefully to understand what you want to achieve. Then we thoroughly explain our advice and step you through the documents. You can be sure you know the full consequences.

Share our knowledge

We will pass on as much knowledge as we can, so you can make your own informed decisions. We want to make you truly independent.

Stick to our knitting

We only do what we're good at. You can be confident that we know what we're doing and don't pass on the cost of our learning.

Work as one team

Someone will always be available to answer your questions, or point you in the right direction. You will also benefit from a range of perspectives and experience.

Fair pricing

For advice and documents, we provide a fixed or capped quote so you don't take price risk. If you're in a dispute, we map out the process and costs so you know what to expect.

It's your show

We're not in this for our egos. We're in it for a front row seat to witness your success.

Ready to manage this performance issue with a process that protects your business?

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