As an employer, you may have to undertake performance management for an underperforming employee. This situation can often be challenging to navigate, as it may affect your employee’s morale and require close consideration of your legal obligations as an employer. A failure to appropriately manage performance may result in an employee claim being brought against your business. Hence, a crucial part of performance management or any general disciplinary process is issuing a formal warning letter to your employee. This article will discuss:
- a formal warning letter;
- when you may need to issue one;
- what it should contain; and
- how to deliver this to an employee.
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
What is a Formal Warning Letter?
A formal warning letter is a form of disciplinary action. The letter, which you should issue following a performance management or disciplinary process, tells employees that their performance and conduct at work are unsatisfactory.
A written warning will generally inform the employee:
- of the employee’s performance or conduct issues;
- why you did not find the employee’s response to the issues to be acceptable;
- of a reasonable timeframe within which your employee must remedy their poor performance and conduct; and
- that if the employee continues to underperform or engage in misconduct, other disciplinary action may be taken, including termination of employment.
Why Give Formal Warning Letters?
An employer provides this kind of letter to their employee when they are underperforming or engaging in misconduct at work. Misconduct is when an employee does their job poorly or behaves unacceptably.
Further, an employee behaves unacceptably if they:
- fail to observe workplace rules, procedures or policies;
- cause disruption or negativity in the workplace, such as speaking negatively about their employer; or
- acts inappropriately, such as by telling an inappropriate and offensive joke.
However, unacceptable behaviour on the part of an employee is not the same as serious misconduct. That describes an action which causes serious and imminent risk to:
- the health and safety of another person; or
- the reputation and commercial viability of the employer.
How Do I Give a Formal Warning Letter?
Giving a formal warning letter involves a process. Employers need to follow this process not just because it reflects best practices; if the employee later lodges an unfair dismissal claim against you, the Fair Work Commission will take note of your conduct.
1. Organise a Meeting With the Underperforming Employee
The first step for an employer is to organise a private meeting with the underperforming employee to discuss the situation. Next, you should notify your employee to attend a meeting concerning their performance and conduct. Generally, the employee should be given at least 24 to 48 hours notice of the meeting and allowed to have a support person present during the meeting.
During your meeting, you should tell your employee your concerns about their performance and discuss your issues with them. You should let them respond to your concerns and listen to what they say. You should also explain the potential outcomes of the meeting, such as:
- a performance improvement plan;
- a written warning; or
- termination of employment.
2. Follow Up After the Meeting
Once the meeting is over, you should document the meeting and its outcomes. Afterwards, you should make it a point to follow up regularly with the employee. These sessions enable you both to discuss progress and if any additional support or help is necessary—for example, informal training. If the employee’s performance or conduct has improved, be sure to acknowledge this.
What If An Employee’s Performance Has Not Improved?
However, if their performance or conduct does not improve, an employer can:
- hold an additional meeting;
- implement a performance improvement plan (if applicable); or
- issue a formal warning letter.
Of course, you can terminate their employment. However, this action is not advisable at this stage of the process. Termination is the option of last resort. If the employee later made an unfair dismissal claim, the Fair Work Commission will look at the context of the termination and also see if you followed a procedurally fair process.
There are no limits on how many warnings an employer can give to an employee or a specified number of warnings that they must give. The guiding principle in instances of underperformance is to give an employee the opportunity to fix the situation.
Key Takeaways
If you need to undertake performance management for an underperforming staff member, you will likely need to issue a formal warning letter. Warning letters should clearly state the issues, a timeframe for improvement, and potential disciplinary actions. By following a fair process, you can reduce the risk of an unfair dismissal claim.
If you need help issuing a formal warning letter, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
A formal warning letter should inform the employee of their performance or conduct issues, provide a reasonable timeframe for improvement, and warn of potential disciplinary actions, including termination.
Following a fair process is crucial to reduce the risk of an unfair dismissal claim. If an employee lodges a claim, the Fair Work Commission will consider the employer’s conduct during the process.
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