Engineer awarded compensation for termination lacking procedural fairness
The Fair Work Commission has awarded compensation to an engineer terminated for underperformance spanning a six-month period, despite acknowledging there was a valid reason for his termination. The case again highlights the requirement that employers afford procedural fairness to employees in all situations when assessing performance or behaviour.
The engineer had been employed by the Bustech Group until his dismissal on 9 July 2021. The employer is a private business designing and manufacturing buses in South Australia and Queensland. He had been employed for over 14 years, the majority of which had been with other companies that were absorbed into the current entity.
Management was first alerted to concerns about the engineer by other colleagues in January 2021. Consequently, the Chief Technology Officer (CTO) formed the view that the engineer was underperforming as his work quality was not up to his seniority or pay grade level, and his output was slow, affecting others in the production process.
The decision was made to gradually assign him less complex tasks, but he was not advised of the underlying reasons for changes in his duties.
An initial meeting was held between the engineer and the CTO in either late March or April 2021. Although there was conflicting evidence as to the intent of the meeting and what occurred, Deputy President Peter Anderson said that it could be best described as `performance counselling’ rather than a `performance meeting’. As he noted,
“No record was kept of the meeting. It was not a disciplinary meeting. There was no warning given or reference made to the consequences of performance failure. The objective of the meeting was to formally advise of performance concerns and offer support to (the engineer) to overcome those concerns; and the meeting ended on a friendly and supportive basis in which (the CTO) offered to continue to work with (the engineer) via allocation of less complex works to raise his performance.”
Shortly thereafter, a new line manager was assigned to monitor the engineer’s performance. He would allocate tasks to the engineer and have one-on-one discussions with him after group meetings to ensure he clearly understood his tasks. Unbeknown to the engineer, the line manager also met with the CTO every three days to discuss the engineer’s performance. Their collective view was that he was still underperforming.
A further meeting was held between the engineer and the CTO on 4 May 2021. Deputy President Anderson described this as a more formal meeting, where the engineer was told that he would be performance managed due to concerns with the quality of his work and slowness of output. Critically, as the Deputy President noted,
“(The CTO) did not warn or reference the consequences of performance failure. The objective of the meeting was to let (the engineer) know that he was to be performance managed given that previously discussed performance concerns continued…However, (the CTO) did not refer to what `performance management’ meant nor the steps in that process. No plan was tabled. No benchmarks, deliverables or time frames were discussed”. Again, no record was kept of the meeting.
At the end of June 2021, production was halted on a particular bus line when staff identified that a weld wire had been installed inconsistent with the client’s specifications. An investigation revealed that the error was linked to drawings prepared by the engineer.
The engineer was called to a meeting on 9 June 2021, told that there had been ongoing issues with his performance for several months, and was dismissed with immediate effect.
In determining the case, the Deputy President acknowledged that there was a valid reason for the dismissal of the engineer, based upon the deficiencies in his work quality and timeliness.
However, he determined that the engineer had been denied procedural fairness. As he noted,
“The so-called `performance management’ prior to dismissal was ham-fisted. It matters not whether (the CTO) told (the engineer) on 4 May 2021 that he was under performance management or whether he was going to be put under performance management. The relevant fact is that (the engineer) was never put on a formal management plan…In substance, there was no established benchmark or review point against which (the engineer’s) performance was to be assessed.”
In summation, he noted critically,
“the two meetings with (the engineer) were not recorded…there was no mention of possible disciplinary consequences, and at no time did (the CTO) explain what `performance management’ meant notwithstanding those words being used during the second meeting…he was denied procedural fairness including because he was denied a relevant opportunity to respond prior to dismissal that his performance failures warranted disciplinary sanction that may include dismissal”.
Although determining the termination to be unfair, the Deputy President did not believe reinstatement to be practical in the circumstances. Instead, he awarded the engineer a gross sum of $21,471.15 plus applicable superannuation, the equivalent of eleven weeks’ pay.
For questions about managing performance, procedural fairness, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 925 529, 0417 622 178 or via email to firstname.lastname@example.org
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.