Poor performance or misconduct? An important distinction

Libby Pallot, Walter MacCallum, Anthony Massaro, Ben Tallboys, Abbey Burns and Caitlin Walsh

When will an employee’s poor performance constitute misconduct? The Fair Work Commission has considered this question in the recent unfair dismissal decision of Steven Zirilli v StarTrack Express Pty Limited [2019] FWC 3557.

Facts leading to dismissal

Mr Steven Zirilli, a Bulk Fleet Supervisor, was dismissed for misconduct by StarTrack Express after eight years of employment. He was responsible for reviewing around 70 – 80 driver run sheets each morning for compliance with internal and legal requirements regarding safety and fatigue management.

StarTrack Express conducted an audit of driver run sheets, and 39 non-compliant run sheets were signed off as compliant by Mr Zirilli.

Mr Zirilli said that he had not been provided with appropriate training and requested policies and procedures so that he could learn how to properly sign off on run sheets. He also said that he wanted to resolve the issues so that he could continue his employment with StarTrack Express.

StarTrack Express ultimately decided to terminate Mr Zirilli’s employment for failing to correctly perform his duties, saying that he “showed no real understanding of the importance of the issues raised”.

Poor performance vs misconduct

Although Senior Deputy President Hamberger found that while StarTrack Express did have a valid reason for terminating Mr Zirilli’s employment - due to his repeated failures to review run sheets in line with company policies - Mr Zirilli’s dismissal was wrongly interpreted as a matter of misconduct as opposed to poor performance. Mr Zirilli’s failures to perform his duties were not willful or deliberate, but “in the nature of mistakes” and resulted from a “lack of due diligence”.

No warning about unsatisfactory performance

Importantly, Mr Zirilii was not given a warning that his performance was unsatisfactory before his dismissal. This meant that he had not been provided with an opportunity to improve. Further, he had told his employer that he was “ready and willing” to complete additional training and try to resolve any performance issues.

On this basis, Mr Zirilli’s dismissal was found to be harsh and unreasonable.

A reminder to employers

Recognising the difference between poor performance and misconduct can often be challenging for employers. However, failing to correctly distinguish between performance and misconduct issues may lead to a successful unfair dismissal claim.

  1. Poor performance means that an employee is failing to meet the expectations of their role. This could be insufficient output, not following procedures or producing poor quality work.
  2. Misconduct means unacceptable employee behaviour such as discrimination, sexual harassment, theft, fraud, misusing company property or information or refusing to follow lawful and reasonable directions.

Where an employee is underperforming, employers should clearly set out their expectations around improvement and give the employee a chance to improve their performance. Employers should also consider providing regular feedback and reviews, to identify and manage poor performance early.

If you would like advice on performance management policies or processes, or how to manage employee behaviour in the workplace, please contact the Russell Kennedy Workplace Relations, Employment and Safety team.

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