Most people love a chat. However, understandably, most managers and employers often avoid having difficult conversations with their employees because it can be awkward, confrontational and time consuming. Unfortunately, avoiding what needs to be said can grow into a major issue causing legal risks and reducing an employer’s ability to successfully defend legal claims should they arise.
We see a large number of conflicts at the workplace arise due to either an employer’s reluctance to have a tough conversation with an employee, or as a result of the inability to handle the particular situation correctly.
In this article, we look at some of the most common conversations often avoided or completely mismanaged and provide practical guidance to assist in having those tough conversations at the workplace.
Dealing with an underperforming employee
It is no surprise that employers benefit most from motivated staff that are performing at their best. Implementing effective performance management systems can have significant benefits for any organisation. Managers need clear procedures and organisational support to manage issues that arise. By providing a consistent approach to performance management, managers can more effectively create opportunities to resolve problems rather than perpetuate them.
As a general rule, prevention is better than dealing with an issue after it has arisen. The best manner in which to prevent performance issues from arising is to ensure that both the employee and manager are clear as to the performance and behaviour expectations. This discussion should occur on commencement of employment and should be revisited on a frequent basis informally. However, if a performance or behaviour matter does arise, it is best to deal with it immediately.
Some easy to follow steps include:
- It is important to first identify and assess the issue(s) prior to meeting with the employee.
- For example, it is vital the employer is clear as to whether the problems relate to behaviour or performance or both.
- The employer must ensure they can properly articulate the issues and provide cogent and relevant examples. It is not helpful to be vague and non-specified.
- The employer should then organise a meeting with the employee to discuss the problem.
- The employer should advise the employee of the purpose of the meeting.
- At the meeting the employee should clearly understand what the problem is, why it is a problem, the impact on the workplace and why there is a concern. In addition, it may be helpful to refer to positive things the employee has done to demonstrate you recognise their strengths. The meeting should be an open discussion where the employee has the opportunity to explain themselves or make comments.
- A clear action plan should be developed with the employee which may include performance improvement milestones, clarifying responsibilities of the employee, further training and realistic timeframes to demonstrate improvement.
- A further meeting should be arranged to review progress and discuss the employee’s performance.
An effective performance management process should be empowering and respectful while being delivered fairly with the necessary feedback. Employers should keep a written record of all discussions, feedback provided, and goals and achievements relating to underperformance in the event further action is required.
Further, employers should organise regular performance appraisals with all employees as a way to provide ongoing feedback. Regular informal catch-ups are more effective, honest and generate transparent communication about performance rather than bottling it up for a yearly performance appraisal.
Having the dismissal or restructure conversation
Delivering organisational change news which may result in redundancy or dismissing an employee is never easy. However, managing the process and providing clear and direct communication imperative both for the individual and the organisation.
Ensuring there is a clear and consistent message that provides the employee with clarity and understanding about the situation, and how it will affect them, is essential. In addition, employers need to be prepared to listen and answer questions and recognise that people will respond differently to these difficult conversations. Managers must show compassion and care while being respectful and supportive. This does not necessarily mean that they must agree with the employee’s point of view.
As a matter of best practice, employers should point individuals being made redundant or dismissed to support networks such as counselling services provided by the employer.
It is also important that employers brief their management team on how to maintain optimal performance and keep staff motivated during any change management process.
In circumstances of dismissal, it is important that the employee is informed before the meeting of the purpose of the meeting and asked to bring a support person to the meeting. The employee should be given an opportunity to comprehend and process the information provided to them during the meeting and it is best practice to then have a further meeting to actually finalise the dismissal. All the necessary paperwork, including the letter of termination must be given to the employee at the time of dismissal.
Dealing with investigations
Conducting a workplace investigation into an employee’s behaviour can be daunting. As is often the case, an investigation may sometimes lead to employees adopting an adversarial attitude. One of the most obvious procedures commonly not followed is an employer’s own investigation policy. Employers should also consider whether it is more appropriate to outsource an investigation to an external party to ensure the process is independent. Regardless of the subject-matter of any investigation, it is always recommended that employers seek professional advice prior to commencing such processes.
Having the hygiene and grooming conversation
What if your employee has bad body odour or is wearing inappropriate attire to work? Is it appropriate to make subtle cues like leaving a bottle of deodorant on their desk? Many managers, especially male ones, are afraid to confront female employees about their clothes, makeup or hair. The best approach is to address the issue directly by meeting with the employee concerned. In this meeting, the manager should be direct, discreet and non-judgmental in the conversation. The conversation should be professional, in a private setting and the employee should be given a chance to respond. Poor hygiene can be the result of health and disability issues and/or age. Generally, employers should ensure there are clear policies and standards for dress and presentation in the workplace from the commencement of employment to guarantee employees always know what is expected.
What legal risks can arise from avoiding difficult conversations?
Unfair dismissal claims
It can be difficult when defending an unfair dismissal claim to rely on an employee’s previous unsatisfactory performance merely because a manager failed to have a difficult conversation with the employee regarding their performance at the appropriate time. Addressing such issues with employees early and giving them a genuine opportunity to respond or improve, is a key element to procedural fairness. Without providing this significant opportunity a dismissal maybe found to be unfair by the Fair Work Commission notwithstanding that an employer may have had legitimate grounds for the dismissal.
In addition, an employer must demonstrate they have met any obligations under the applicable Modern Award to consult with the employee and/or assist in finding alternative employment in the case of redundancy. Failure to do so may result in the employee being reinstated or the employer being ordered to pay compensation for unfair dismissal.
Anti-bullying laws came into effect on 1 January 2014 which have given workers experiencing bullying a certain level of protection. Therefore, by having an effective performance management process and raising issues of underperformance or misconduct in the early stages with employees, may reduce accusations of bullying at a later stage where the employer now wishes to implement a performance improvement plan or similar performance monitoring. It is vital that employers, for this reason, introduce appropriate workplace policies for performance management.
Adverse action claims
Clear communication with employees about their underperformance or misconduct can help an employee understand the reasons for decisions that may adversely affect them. This will assist in reducing the risk that employees are likely to suspect and assert that the decision which adversely affects their employment was taken for a prohibited reason (such as discrimination).
Relevant Case Law
In Fichera v Thomas Warburton Pty Ltd  FWA 4382 an employee who held the position of Branch Manager had low sales and was underperforming. It was found that the employee was incapable of providing the necessary leadership to improve the performance of the branch and this was found to be a valid reason for dismissal. Unfortunately, the employer failed to follow its own performance management process and warn the employee that his employment was at risk. This resulted in the dismissal being unfair.
In Clarke v Formfile Infosoft Pty Ltd  123 IR 222 employees were made redundant due to a downturn in business. The employees were notified that they were being dismissed due to redundancy but were not notified of the reason as to why their positions were selected for redundancy. It was held that the employees were not properly notified of the reason for termination before the redundancy took effect.
In Krygsman-Yeates v State of Victoria  VMC 57 a teacher alleged that she sustained an adjustment disorder with mixed anxiety and depressed mood as a result of having her performance subjected to monitoring and mentoring, and being bullied and harassed by the school principal. The Court found that the action taken was ‘management action’ based on reasonable grounds. However, the management action was not taken in a reasonable manner because:
- A three-page letter detailing performance related issues was provided to the employee on her first day returning from long service leave;
- Guidelines on monitoring and mentoring were not followed;
- Feedback was not provided to the worker during monitoring and mentoring processes; and
- Insensitive and unreasonable action was taken by continuing to provide comment by way of letters to the employee despite her previous emotional response and reaction to receiving such letters.
What can employers do?
To ensure employers are protecting their businesses, they ought to ensure managers and supervisors:
- Are educated and trained in accordance with the company’s management processes and policies. This should be done through practical workplace training on the importance of open communication and encouragement to have difficult conversations.
- Are informed of the importance of keeping detailed written records of conversations and following company processes.
- Invest in developing emotional intelligence and people skills so they possess the relevant and necessary skills to communicate effectively with employees, understand the underlying causes of performance issues and can respond appropriately.
- Put in place proper workplace policies and ensure all employees are aware of the policies and how to follow them.
We often advise companies and directors in relation to their employment obligations, and have worked closely with organisations to ensure they protect themselves from any potential conflicts that may arise in the workplace. We provide a range of workplace training options for both managers and employees. We can also work with your organisation to develop and refine existing policies for your workplace and assist in the implementation of any new procedures.
If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment law issue, please do not hesitate to contact us.
This alert is not intended to constitute, and should not be treated as, legal advice.