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Having an underperforming employee is a fraught situation for all employers. Sometimes it is necessary for them to issue a final employee warning letter where other methods have been exhausted. This article details what a final employee warning letter is, what it should contain, and how it should be delivered to the employee.

What is a Final Employee Warning Letter?

A final employee warning letter advises your employee that you consider their work performance unsatisfactory and that absent improvement, you will terminate their employment. A final warning letter differs in content from any formal warning letters that might have been issued to the employee earlier.

What Should a Final Employee Warning Letter Contain?

Your letter must provide the employee with details about the performance or conduct that is of concern to you. Be as specific as possible. The reason for warning letters is to give an employee the chance to improve their performance. If they cannot accurately define what conduct is at issue, they will be unable to do this.

You also need to tell the employee what you discussed with them about this issue on previous occasions. For example, if you had had any prior meetings with the employee to discuss their performance, detail when the meetings took place and what exactly you discussed. If you both agreed on a performance management plan during any of these meetings, these should be noted that as well.

You should also detail how the employee performed on their management plan. Again, be as specific as possible. Discuss if they implemented any of the steps or strategies for improvements. If the plan included clear goals or benchmarks to be met, talk about whether they achieved them.  If they did not, note that as well.  

Importantly, you need to explain why their performance remains unsatisfactory to date.

You must outline those goals or expectations that the employee needs to meet. These cannot be unlawful, discriminatory or unreasonable. Also, tell the employee how you will assist them to achieve these goals. You must provide the employee with a reasonable timeframe in which they can meet these expectations before you make any further decisions about their employment.

You also need to inform your employee that the employee warning letter is final. Expressly tell them that if their performance fails to improve, you will terminate their employment. It is not merely an issue of fairness. It is also legally prudent.

If you terminate their employment and the employee later lodges a claim for unfair dismissal, the Fair Work Commission will look at the circumstances of their termination. The Commission will note whether you have clearly explained to them in writing the details of their underperformance, and the consequences of failing to improve.

Terminating employment is considered the option of last resort. It is an excellent idea to provide a means whereby the employee can contact you to discuss the letter in private.


How you deliver the final employee warning letter is also important. Be sure that they receive it and accurately document the circumstances of its delivery. Record the date, the time, the method of delivery. Also, if you or the employee say anything at the time of delivery, note that as well.

You may choose to deliver the letter during a private meeting with the employee.  If you do, the employee has the right to bring a support person with them to the meeting.

You need to be sure that they read the letter and understand it. An employer might ask the employee to return a signed copy of the letter at a later date to demonstrate this. However, employees are not legally obliged to sign any copy of the letter. Alternatively, follow up with the employee at a later time to check that they have both read and understood it. Always keep a copy of the letter for your records.

Key Takeaways

If you do terminate an employee for underperformance, be aware that they have certain rights.  These include their final pay and the correct notice of termination. This notice period varies depending on how long they have worked for your business. Final pay includes leave entitlements as well as any applicable penalty rates or allowances

LegalVision provides businesses with employment law advice. Call LegalVision today on 1300 544 755 or fill the form on this page.


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