In the first article in our Fair Work Fundamentals series, we looked at the core obligations every employer should understand. In this second article, we turn to what happens when those obligations need to be applied in practice, particularly when managing performance, conduct or other workplace issues.
Managing employees is an ordinary and necessary part of running a business. Employers are entitled to set reasonable expectations, provide feedback, address underperformance, manage inappropriate behaviour and, where necessary, take disciplinary action or end an employment relationship.
But under the Fair Work Act, both why an employer takes action and how that action is carried out can be critical.
That makes it increasingly important for employers to understand the boundaries within which they can legitimately act.
In March 2026, the Fair Work Commission reported that General Protections dismissal applications were on track to increase by 80% over the three years to the end of the 2025–26 financial year.
That growth is a timely reminder that employers need to understand the parameters within which they can manage employees, particularly where performance concerns, workplace complaints, leave, illness or injury, disciplinary matters or possible termination are involved.
Employers can manage performance
The Fair Work Act does not prevent employers from managing their people.
Reasonable management action can include providing feedback, addressing poor performance or behaviour, commencing a performance improvement process and taking disciplinary action where appropriate.
The Fair Work Commission specifically identifies actions such as giving an employee performance feedback or placing them on a performance improvement plan as examples of legitimate management action.
The important question is whether there is a genuine and legitimate reason for the action being taken and whether the process is reasonable.
For employers, that means being clear about:
what the performance or conduct concern actually is
what standard or expectation applies
what evidence supports the concern
whether the employee has been told about the issue
whether they have been given a genuine opportunity to respond
what improvement is required and within what timeframe
whether the proposed response is proportionate to the issue.
Performance management should not begin with the outcome already decided.
When does management action become adverse action?
This is where General Protections become particularly important.
The General Protections provisions of the Fair Work Act protect employees from harmful action being taken against them because of certain protected reasons.
This can include an employee exercising a workplace right. For example, making an enquiry or complaint about their employment, questioning their pay or entitlements, taking certain forms of leave or exercising another right provided by workplace law.
Adverse action can include dismissal, demotion, reducing an employee’s hours, changing their position to their disadvantage or treating them differently from other employees.
The crucial issue is why the action was taken.
An employer may have every right to address genuine underperformance or misconduct. But if action is taken because an employee has exercised a workplace right or for another prohibited reason, the employer may be exposed to a General Protections claim.
For example, there is an important difference between:
- Managing an employee because their performance is below the reasonable requirements of their role;
and
- Taking action against an employee because they raised a concern about their pay or made a workplace complaint.
The first may be legitimate management action.
The second may raise General Protections issues.
This is why employers need to be able to clearly identify and demonstrate the genuine reason behind an employment decision.
A valid reason is not always enough
Even where there is a legitimate reason to take disciplinary action or dismiss an employee, the process still matters.
A recent Fair Work Commission decision provides a useful example.
Jones v Exclusive Contracting (WA) Pty Ltd
In Jones v Exclusive Contracting (WA) Pty Ltd, decided in January 2026, an employee was dismissed after making comments about Chinese workers during a workplace meeting.
The Fair Work Commission found that the comments demonstrated prejudice and that the employer had a valid reason for dismissal.
However, there was a significant problem with the way the dismissal was handled.
The employer had made the decision to dismiss the employee before notifying him of the reason for the proposed dismissal and before giving him a genuine opportunity to respond.
Despite finding that there was a valid reason for dismissal, the Commission determined that the employee had not been afforded procedural fairness and that the dismissal was unfair.
The employee was awarded $4,059.44 in compensation.
The case provides an important lesson for employers: Having a valid reason for dismissal does not necessarily make a dismissal fair.
Procedural fairness matters
When considering whether a dismissal is harsh, unjust or unreasonable, the Fair Work Commission can consider factors including:
whether there was a valid reason related to the employee’s capacity or conduct
whether the employee was notified of that reason
whether they were given an opportunity to respond
whether an unreasonable refusal was made to allow a support person to assist in relevant discussions
where dismissal relates to unsatisfactory performance, whether the employee had previously been warned about that performance.
Importantly, an employee should generally be told the reason for possible dismissal and given an opportunity to respond before the final decision is made.
That opportunity needs to be genuine.
Calling an employee into a meeting to communicate a decision that has already been made is very different from raising the concerns, listening to the employee’s explanation and then considering what action should follow.
When should an informal performance conversation become formal?
Not every workplace issue requires a formal process.
Managers should be able to have ordinary conversations about expectations, feedback and areas for improvement.
But employers should consider moving to a more structured process when:
the same performance issue continues despite previous discussions
the issue is significant enough that disciplinary action may follow
the employee is not meeting clearly established requirements
the conduct involved may amount to misconduct
the employment relationship may ultimately be at risk.
At that point, clarity becomes particularly important.
The employee should understand what the concern is, what improvement or change is expected, what support or timeframe is being provided and what may happen if the issue is not resolved.
Good documentation is also important, not simply to 'build a case' against an employee, but to create an accurate record of what was discussed, what expectations were set and how the employee responded.
Before taking action, ask three questions
When managing a difficult employee issue, it can help to come back to three fundamental questions.
1. What is the genuine reason for taking action?
Is there a performance, conduct, capacity or legitimate operational issue that can be clearly articulated and supported?
2. Is there a workplace right or protected reason in the background?
Has the employee recently raised a complaint, queried an entitlement, taken protected leave or exercised another workplace right?
The existence of a workplace right does not mean an employer cannot manage genuine performance or conduct concerns. But it does make it particularly important that the legitimate reason for any action is clear and supported by evidence.
3. Is the process fair?
Has the employee been told what the concern is? Have they had a meaningful opportunity to respond? Has their response been genuinely considered before a decision is made?
These questions can help employers make better, more defensible decisions and reduce the risk of an ordinary workplace management issue escalating into a Fair Work dispute.
Get the fundamentals right before the problem becomes bigger
Managing employees is not about avoiding difficult conversations.
In fact, failing to address performance or conduct issues early can make matters more difficult for both the employee and the business.
The key is to act for the right reason, be clear about the issue being addressed, follow a reasonable process and understand when additional Fair Work protections may be relevant.
With General Protections dismissal applications rising sharply, employers should be particularly careful about the connection between workplace rights and employment decisions.
Good performance management is not about creating paperwork for its own sake. It is about establishing clear expectations, addressing issues fairly and making employment decisions that can be properly explained and supported.
If you are unsure how to manage an employee performance, conduct or disciplinary issue, particularly where dismissal or a workplace complaint may be involved, Total HRM can help you work through the process and understand your obligations.