How do you manage your performance improvement plans?
A Federal Court decision delivered on 26 August 2019 has shown that the inappropriate use of a Performance Improvement Plan (PIP) can be devastating. There is absolutely no doubt that a PIP is a fair and effective tool to remedy under-performance in the workplace, but how you implement a PIP is very important.
The decision handed down on 26 August 2019 resulted in an employee being awarded $205,342 in damages after a court ruled in his favour. The employee had been in the position for longer than 10 years.
In a series of events in conjunction with the PIP, the employee had filed a bullying complaint. The judge stated that “It was as if the employee was from that point set up to fail”.
After the proceedings, the employer went looking for additional reasons to dismiss the employee, which was extremely transparent.
The judge found the employer to have contravened section 340 of the Fair Work Act 2009. This section asserts that “a person must not take adverse action against another person” because he/she has, exercises or proposed to exercise a workplace right. In this case, adverse action refers to dismissal, but can also include refusal to employ, discrimination against or injury of a person.
The judge concluded that the employer “had summarily terminated the employee and, under section 545 of the Fair Work Act 2009, was to pay compensation equal to 12 months pay”.
The Fair Work website states that a business isn’t legally obliged to give an employee warnings before firing them, but “should give the employee a chance to fix any performance issues”. In addition, if a business does give a warning, it should “set clear expectations about what needs to be done differently” and be “fair and reasonable in the circumstances”.
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