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Last month I wrote about the pressure many businesses are facing to reduce their workforce, and what the law actually requires before redundancy becomes a defensible option. | | | |
Since then, the questions coming through have shifted slightly. Fewer people are asking whether they can make roles redundant. More are asking what to do about the individual in front of them — the one who isn't performing, or whose behaviour has become a problem, or who they simply know is no longer the right fit.
Those are harder questions. And they carry their own legal weight.
What I've noticed, and what our website data has confirmed, is that a lot of leaders are searching right now for clarity on exactly this. What's the difference between a performance issue and a conduct issue? What process do I have to follow? What happens if I get it wrong?
This edition focuses on those questions directly. Getting the process right from the start is almost always cheaper, faster, and fairer than correcting it later.
If you're sitting with one of these situations right now, this edition will give you a clearer sense of where to begin, and what to do next. | |
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Performance vs Disciplinary Action: Are You Using the Right Process? | | | |
One of the most common — and costly — mistakes we see right now is leaders reaching for the wrong tool when managing a difficult employee situation. Performance management and disciplinary action are not interchangeable. They serve different purposes, carry different obligations, and produce very different outcomes when applied incorrectly.
If you have someone in front of you who isn't meeting expectations, this article clarifies which process applies, when the two overlap, and what gets businesses into trouble when they skip steps or conflate the two. | |
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Going Deeper on This Topic If you're already in the middle of one of these situations, these articles address the specific stages where risk tends to increase: | |
15 FAQs on Performance Management — The practical questions most managers don't know to ask until something has already gone wrong, answered plainly and with the legal context you need. | | | |
When the Process Itself Becomes the Problem — A Fair Work case study showing how a delayed, poorly communicated internal process created legal exposure, even where the employer ultimately prevailed. | | | |
A Valid Reason Is Not Enough — A WA mine worker was dismissed after a physical altercation. The employer had grounds. They still lost — because the process was rushed and procedural fairness was ignored. | | | |
What a Flawed Termination Actually Costs — An eight-year employee dismissed by email, no consultation, no notice. The FWC awarded $7,700. The real cost to that business was considerably higher. | | | |
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Managing People Under Pressure — What the Law Requires Right Now | | | |
With many businesses still navigating economic uncertainty, we're seeing a sharp increase in questions about performance management, conduct, and termination. These five principles apply regardless of the circumstances driving the conversation.
1. Know which process you're actually in Performance management addresses capability — an employee who is willing but not meeting expectations. Disciplinary action addresses conduct — behaviour that breaches policy, reasonable direction, or legal obligation. Using the wrong process doesn't just create legal risk. It undermines your credibility as a leader and weakens your position if the matter escalates. If you're unsure which applies, that uncertainty is worth resolving before you take any further steps.
Key takeaway: Starting in the wrong process is not a minor procedural error — it can invalidate everything that follows.
2. Act early — not perfectly The instinct to wait for more certainty before raising a performance concern almost always makes matters harder. Early conversations are informal, corrective, and low-stakes. Late conversations are formal, defensive, and high-risk. The Fair Work Commission consistently looks at whether the employee had a genuine, timely opportunity to improve. Delay removes that defence — regardless of how justified your concerns are.
Key takeaway: You don't need a perfect case to start the conversation. You need a documented, fair, and timely one.
3. Document as you go, not after the fact
A short, dated file note made at the time of a conversation is worth considerably more than a detailed summary written weeks later. Contemporaneous documentation demonstrates that expectations were set, support was offered, and the employee had a genuine opportunity to respond. Retroactive records are one of the most scrutinised weaknesses in Fair Work matters — and one of the easiest to avoid.
Key takeaway: If it isn't written down at the time, it is very difficult to rely on later. | |
💡 Did You Know?
The Fair Work Commission finalised over 6,000 general protections dismissal matters in 2024–25. Of those that settled for money, 61% resolved for less than $10,000 — with a median settlement in the $4,000–$5,999 range. Unlike unfair dismissal, general protections claims carry no compensation cap, meaning settlements can be considerably higher when matters proceed to arbitration. Many employers settle early not because they were wrong, but because defending any claim costs more than resolving it. Getting the process right from the start is almost always the cheaper option.
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4. Redundancy cannot substitute for performance management This is one of the most misapplied rules in Australian employment law right now. If the role still exists and the business is still operating, using redundancy to exit an underperforming employee does not constitute a genuine redundancy under the Fair Work Act 2009. The FWC will look at whether the role was genuinely redundant — not whether the relationship had become difficult. The performance management process must be followed regardless of the commercial pressure you're under.
Key takeaway: Redundancy and performance management are separate legal processes. One cannot be used as a shortcut for the other.
5. Process matters even when the reason is clear
The Wiluna Mine case is a useful reminder here. The employer had a legitimate reason for dismissal — serious physical misconduct. They still lost, because the process was rushed, the employee wasn't given adequate time to respond, and contractual obligations weren't honoured. A valid reason is necessary. It is not sufficient. The FWC will assess both.
Key takeaway: Having grounds for dismissal protects you from nothing if the process that led to it was flawed.
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Federal Budget 2026–27: What HR and Business Leaders Need to Know | The Albanese Government's 2026–27 Federal Budget, handed down against the backdrop of oil prices above $100 a barrel and inflation forecasts near 5%, combines tax relief with significant workforce reforms. Key changes include income tax cuts from 1 July 2026, phasing out of junior pay rates in retail, fast food and pharmacy, gender equity reviews across five modern awards, and $85.2 million in skills and migration investment. Business groups are divided — some welcoming productivity measures, others warning the budget fails to address structural reform and deepens compliance burden for SMEs.
Why it matters: Several of these changes take effect from 1 July — the same date as Payday Super and the Annual Wage Review. For employers, July 2026 represents one of the most significant simultaneous compliance moments in recent years. Now is the time to understand what applies to your workforce.
| | Casual work is back under review | AHRI flagged that casual employment is again under active policy review, with pressure coming simultaneously from the parliamentary inquiry into the National Employment Standards and the post-implementation review of the Closing Loopholes laws. The NES inquiry continued public hearings in early and mid-May, while the Closing Loopholes review is due to report by 15 June 2026. The article points to renewed debate around leave, termination notice and the ongoing definition of casual work itself.
Why it matters: Employers that rely on casual labour, peak-period staffing or layered workforce models should treat this as a watch-list item now, because later reform could affect contracts, payroll assumptions and workforce planning.
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No Consultation — FWC Rules Against Disability Provider | In a decision handed down on 10 April 2026, the Fair Work Commission ruled that CDNI Care Pty Ltd had unfairly dismissed a disability support worker, despite the company facing genuine financial distress. The employer failed to consult with affected employees before issuing termination letters addressed "Dear Sir/Madam." Commissioner Sloan ruled that the right to be consulted is "a substantive right and not merely perfunctory." The case was decided under the SCHADS Award 2010.
Why it matters: Financial pressure does not waive consultation obligations, particularly under the SCHADS Award. This case is directly relevant to NDIS and disability sector employers.
| | FWC Applications Hit Record High, and Keep Climbing | The Fair Work Commission received 44,075 lodgements in 2024–25 — a 10% increase on the previous year and 24% above the five-year average. Unfair dismissal applications accounted for over 16,500 of those lodgements. In the first quarter of 2025–26, the caseload accelerated further — up 45% on the three-year average. FWC President Justice Hatcher has publicly described the workload as "unsustainable," with reforms now underway to address the surge.
Why it matters: More claims mean more risk for employers who don't have their processes in order. The bar for procedural fairness has never been higher. | | | |
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Free Download — Performance Improvement Plan (PIP) Template | |
If you're managing underperformance right now, having a properly structured PIP is one of the most practical steps you can take. It sets clear expectations, documents the process, and demonstrates procedural fairness — all of which matter if the situation escalates.
Our free PIP template is ready to use and built around Australian workplace requirements.
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Performance Management Support — Strategic HR Australia
If you're dealing with a performance or conduct issue and are unsure which process applies, how to document it correctly, or how far along you should be before taking further action — that's exactly where we can help.
We work alongside business owners and managers to build clear, fair, and defensible processes — before situations escalate into claims. | |
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We're Welcoming Two New Members to the Strategic HR Australia Team | |
Kim Navales I'm pleased to welcome Kim Navales to the team as our Admin Assistant.
Kim keeps things running behind the scenes — organised, reliable, and across the detail. Having strong operational support allows us to focus on what matters most: delivering quality HR outcomes for our clients.
Welcome to the team, Kim. | | | |
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Natasha Snyman
I'm also pleased to introduce Natasha Snyman, who joins Strategic HR Australia this month as an HR Advisor.
Natasha brings over 15 years of HR and employee relations experience, a legal background, and a sharp eye for compliance. The kind of grounding that makes a real difference when workplace matters get complex. She has worked across mining, professional | | | |
services, retail, and the community sector, and since relocating to Australia in 2023 has built solid experience advising under the Fair Work framework.
I'm looking forward to what she brings to our clients and to the team. | |
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Junior Client Service Administrator
We're currently recruiting on behalf of a growing financial planning practice in Osborne Park. This part-time role (3 days per week) suits a second-year student or recent graduate looking to build a career in financial planning. Full training is provided. | |
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In June, we’ll be hosting a roundtable session in collaboration with Business Women Australia (BWA), bringing together business owners and leaders for a practical discussion on Building Great Teams.
The session will focus on practical, peer-led insight to help leaders strengthen culture, improve performance and retention, and put the right foundations in place before people issues become risk.
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Connect With Our HR Experts
Call us today at 08 6117 9270
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Reach out to us at: support@strategichr.com.au
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