Strong performance management is crucial to organisational success and a winning workplace culture. This includes managing under-performance as well as appropriately utilising the skills and capabilities of all staff to build a high-performing business.  Managers need to provide fair, accurate and consistent feedback that complies with workplace law.


In late 2014, a case before the Federal Circuit Court highlighted the importance of thorough exploration into the reasons for employee under-performance and how it is managed. A solicitor with a Government organisation was increasingly absent from work after breaking his leg.  It later eventuated that he was also suffering from depression. The employer accused the solicitor of misconduct, citing such examples as the solicitor not notifying his employer — within an appropriate time frame — that he would be unable to attend work on particular days, and failing to brief counsel or file necessary documentation for a trial deadline.

The solicitor alleged he was dismissed over a temporary absence because of illness or injury, or that he was the subject of adverse action because of his physical or mental disability. During the proceedings, the judge observed that the employer’s “entire demeanour suggested a certain disdain for the proceeding as a whole”, yet his evidence had been “given honestly”. Despite this, the judge also found that the employer’s evidence regarding his reasoning for the solicitor’s termination was “unreliable” and the solicitor’s mental disability was a reason for the decision. The judge ordered that the solicitor be reinstated to his former or an equivalent position, that he be paid $93,750 in compensation and that the employer pay him a pecuniary penalty of $10,000.

The employer later appealed Federal Circuit Court decision, with the Full Federal Court determining that the employer did not take adverse action against its former employee. The Full Federal Court found that a portion of the solicitor’s misconduct did not relate to his mental health issues, citing three incidences of un-notified absence or late arrival were the result of visiting a friend in hospital. In fact, his 20 February 2012 failure to attend court during the arraignment of an accused, despite an instruction to do so, also occurred because of his wish to visit said friend in hospital. Following this occasion, the solicitor attended court despite an explicit instruction not to do so — again, an event that was not attributable to the his illness. As a result, the court upheld the employer’s appeal.

Mental illness and absenteeism is a growing concern for Australian business. A recent report by PWC Research claims that absenteeism, reduced productivity and compensation claims cost Australian workplaces approximately $10.9 billion per year. It is notable that, in this case, the Court was careful to look at the actual circumstances that drove the behaviour of both parties, requiring the employer to outline the instances of actual under-performance, separate from the employee’s illnesses.  In this regard, fairness in performance management was the overriding factor.


iHR Australia believes it is important that managers work with employees to establish the underlying causes of under-performance to avoid costly and time-consuming court action. A key part of this is providing fair, accurate and timely feedback to employees to help set meaningful expectations, determine appropriate resolutions and drive potential behavioural change.

iHR’s Managing Everyday Performance training offers techniques to conduct effective everyday performance conversations with staff and give feedback to staff that is fair, accurate and consistent with the expectations of workplace law.  It also emphasises the importance of fairness and accuracy in managing performance and maintaining consistency between all elements of this process.


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