This document is a letter of termination to be used in circumstances where the employee has had unsatisfactory work performance, or behavioural issues. The letter provides for termination with notice to the employee.

If you need a letter to terminate employment due to serious midconduct instead of poor performance, there is a separate precedent available (“Letter of termination (for misconduct, without notice)”).

Please note the following issues relating to termination for poor performance.

Litigation risk

Terminating employment due to poor performance or serious misconduct is an area of law fraught with litigation risk. Every employer should therefore have basic processes and procedures to manage poor performance in the workplace. These processes and procedures are usually set out in a Human Resources Policy which includes transparent processes to dismiss and discipline employees.

Given the high risk that an employee terminated for poor performance will challenge the decision, it is very important that the entire process is well documented by the employer. This documentation can be used by the employer as evidence should litigation ensue.

What constitutes poor performance

In Australia, underperformance (or as it is commonly referred to, poor performance) can take the form of unsatisfactory work performance, non-compliance with workplace policies, or unacceptable, disruptive or negative behaviour.

Underperformance is not to be confused with misconduct. Misconduct is regarded as seriously “bad” behaviour such as theft or assault and often warrants immediate dismissal. A separate precedent is available for termination without notice due to serious misconduct.

Relevance of unfair dismissal

When considering whether to terminate the employment of an employee, it is important to be aware of the laws relating to unfair dismissal and unfair termination to ensure that the termination will not fall foul of these laws.

For example, where an employee has the right to challenge the termination under the Fair Work Act 2009 (Cth), the employee can allege, amongst other things, that the termination was unfair due to inadequate provision of warnings, insufficient opportunities to respond to warnings or to improve behaviour, or that there was no valid reason for termination.

When using this precedent

It is a legal requirement that an employee be notified of the reasons for his or her dismissal in writing. The reasons for dismissal should be clear and accurate. It is important that the employer avoid providing vague and general reasons for dismissal as this would give a court or tribunal a wide berth to “fill in the blanks” and potentially infer discriminatory reasons for the dismissal.

Even where termination of employment is due to poor performance, the employee is entitled to:

·            his or her contractual notice period or statutory minimum notice period if this is not set out in their employment contract; or

·            payment in lieu of notice.