In the unfair dismissal jurisdiction, the Fair Work Commission (FWC) is required to consider a number of factors under the Fair Work Act 2009 (Cth) (FW Act) when considering whether a dismissal was ‘harsh, unjust or unreasonable’.
One such factor is, if the dismissal is related to unsatisfactory performance of an employee, whether or not that employee was warned about their unsatisfactory performance before the dismissal.
In the recent case of Thapaliya v Caddle Investments Pty Ltd T/A Edenwood Automotive  FWC 3294, the FWC was required to consider whether a series of informal warnings issued to an employee was sufficient warning of his unsatisfactory performance under the FW Act.
The employee had worked as a Mechanic for Edenwood Automotive (the Employer) for eight months before he was dismissed in March 2021. As part of his role, he was expected to work on light vehicles which were allocated to him by the Employer. This included completing the work on the vehicle, test driving the vehicle, signing-off a job card and leaving the vehicle for customer payment and collection.
In the first six months of the employee’s employment, the Employer developed significant concerns about the employee’s workmanship. In particular, the Employer was receiving customer complaints about vehicles that had been repaired by the employee and which were subsequently assessed as requiring re-work at the Employer’s expense.
The Manager and Head Mechanic spoke to the employee on a regular basis and made suggestions about how the employee might go about completing a mechanical task to the Employer’s standard. They also issued the employee with numerous informal warnings which were recorded as corrective actions in non-conformance reports.
Over time, the customer complaints became more frequent and between the period of July 2020 and March 2021, there were twelve vehicles which required re-work after the employee’s initial repair. On one occasion, the Head Mechanic was moving a car which the employee had left ready for customer collection only to discover that the brakes were not working and he had to use the hand brake to stop the vehicle.
The Employer ultimately dismissed the employee in March 2021 on the basis that his performance had not improved despite being given multiple warnings and opportunities for improvement.
The employee made an application to the FWC the following day. The employee claimed that his dismissal was unfair because he was never made aware of any substandard workmanship or customer complaints, nor was he counselled or warned during the course of his employment.
The Employer denied the claim, maintaining that the employee’s performance was unsatisfactory and that the employee’s workmanship was discussed with him on multiple occasions, including with informal warnings.
The FWC accepted the Employer’s evidence of numerous customer complaints which were directly related to work completed by the employee. It was of the view that these failures, particularly the handling of car brakes, concerned core duties and competencies required of a qualified mechanic and were reasonably expected by the Employer. It also accepted that the complaints were indicative of the employee failing to improve despite continuous instruction and guidance.
The FWC was satisfied that these performance failures by the employee constituted a valid reason for dismissal.
In considering whether the employee was sufficiently warned about his unsatisfactory performance prior to the dismissal, the FWC looked at whether the informal warnings by way of non-conformance reports provided sufficient warning of unsatisfactory performance.
The FWC was of the view that the employer had failed to provide the employee with formal warnings about his performance to draw attention to the prospect that ongoing failure would lead to disciplinary action.
However, the FWC was satisfied that the Employer consistently discussed performance deficiencies with the employee throughout his employment and therefore the employee had ample opportunity to respond and correct his actions.
The FWC was satisfied that the employee had been “instructed, retrained, counselled and warned as and when issues of concern arose” including:
- The employee was provided retraining on the brake machine on multiple occasions;
- The employee was provided written instruction requiring corrective action on taking care of vehicles;
- The employee was counselled on how to replace the brake pads and this was recorded in non-conformance reports requiring corrective action; and
- The employee was warned about failing to fill transmission oil and not repairing brakes correctly and this was recorded in non-conformance reports requiring corrective action.
The FWC held that employer’s failure to provide formal warning to the employee about his performance weighed against the “collective performance failures and their continuing nature notwithstanding instruction, retraining, counselling and warning” could not lead to a conclusion that the dismissal was unfair.
The application was therefore dismissed.
Lessons for employers
When issues relating to an employee’s performance arise, it is important for the employer to provide the employee with sufficient opportunity to improve their performance and to make it clear to the employee that a failure to improve can lead to disciplinary action, including dismissal. These steps will be considered by the FWC in determining whether a dismissal relating to performance is unfair.
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