Despite procedural flaws, termination upheld as lawful

Despite procedural flaws, termination upheld as lawful.png

Despite procedural flaws, termination upheld as lawful

The Fair Work Commission has upheld the termination of a Sales Manager who had a history of declining sales, despite concerns being expressed in the methods undertaken to manage his performance.

The Sales Manager had been employed by a kitchen hardware products supplier operating in Melbourne, Sydney and Adelaide. He had been employed since 11 May 2015 based in Melbourne until he was notified of his dismissal by a letter dated 25 March 2020 with an effective termination date of 22 April 2020.

The manager claimed to Commissioner Katrina Harper-Greenfell that his declining sales were due to factors outside of his control, such as product price increases, changes in areas of control, and less flexibility in negotiating prices directly with clients. It was noted that he had been disrespectful and intimidating towards other staff and openly non-complimentary about particular management team members.

Ultimately, as Commissioner Harper-Greenfell identified in her decision, what was not disputed was that there had been a genuine decline in his sales performance over the last 12 months of his employment.  She noted that he failed to achieve his sales budget in July 2019 and each month from September 2019 to March 2020.

His claims that bushfires had impacted his sales area were rejected. It was also noted that he concentrated the majority of his sales effort on clients that were located within a radius of only 10 km from his house.

As the Commissioner concluded,

“I am satisfied that there is sufficient evidence to support a finding that Lek Supply had a valid reason to terminate (the manager). This termination was on the basis of his performance and that he had failed to meet his budgeted sales targets”.

Where the Commissioner was critical of the company was the way in which it chose to terminate the manager. He had attended scheduled medical appointments on 23 and 24 March 2020, with the full knowledge of his employer. However, the following day he was requested to attend a meeting at which he was informed he was being terminated.

While not fatal to the decision to terminate him, the Commissioner did comment,

“the performance management process was rushed and lacked sufficient planning that would have resulted in a reasonable opportunity to address the sales concerns raised by (his general manager)…However, considering (his) and Lek Supply’s declining relationship, (his) perception of Lek Supply, and his responses during the termination meeting, I have formed the view that (his) conduct would have resulted in the same outcome”.

The application was dismissed.

G S v Lek Supply Pty Ltd (U2020/6350) 19 July 2021

For questions about managing employee performance, terminating unsatisfactory employees, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 WAL LAW, 0417 622 178 or via email to dean.cameron@workforceadvisory.com.au

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.

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