What happens when you need to deal with an underperforming employee in a remote work setting? A legal expert weighs in on virtual performance management.

Despite seeing the light at the end of the tunnel in terms of the various state lockdowns lifting at some point in the near future, many employees will continue to work from home for the foreseeable future. 

This means employers need to remain vigilant about their continuing obligations to remote workers. They also need to consider the new and unique challenges that have arisen as a consequence of employees spending months away from the physical office.

One common remote work challenge is managing performance issues. Here are some important tips to keep in mind.

Virtual performance management is a new playing field

Where an employee isn’t performing to the required standard, employers are entitled to implement a performance management process, notwithstanding that employees have been working remotely and may continue to do so for some time. 

However, it’s important to have regard for any barriers to performance that have arisen due to this required mode of work. For example, has their performance been affected because of:

• An employee’s reliance on their home internet and computer devices, which may not be as fast or up-to-date as the office equivalents, for example.
• Difficulty contacting relevant people to get their work done.
• An employee having to manage concurrent caring responsibilities or homeschooling.
• Mental health or social challenges that have been exacerbated by the pandemic (e.g. being isolated from peers and colleagues for months at a time).

Failure to have regard for such matters may result in issues for employers down the track if they seek to rely on performance issues to justify dismissal.

How to implement a fair process

Where it may be necessary to terminate employees who are working remotely, employers should proceed with caution and ensure that procedural fairness continues to be adhered to – to an extent that’s reasonably practicable – to avoid the Fair Work Commission (FWC) finding that any dismissal was harsh, unjust or unreasonable due to procedural failures. 

This includes providing adequate warnings and notice, and giving reasonable opportunities to improve and to respond to claims of underperformance, as would be the case if an employee was not working remotely. 

While it may be a challenge to meet with the underperforming employee in person, as part of the performance management or termination process, you should still opt for a face-to-face option, such as a video call, to mitigate the risk of the employee feeling aggrieved at receiving such news via a phone call, email or text.

The FWC decision Petersen v Allpet Products illustrates the importance of the above matters. 

In this instance, an employee was let go due to underperformance during the pandemic.

In finding that the employee’s dismissal was unfair, the FWC said the employer should have considered the impact of the pandemic on the employee’s ability to perform her duties, and performance issues could not be assessed against pre-pandemic work hours and standard performance criteria. 

The FWC was also critical of procedural defects around the termination, including a failure to provide an opportunity to address or correct the issues, and terminating the employment without notice by email without a call or meeting. 

This demonstrates the importance of employers being mindful of the new challenges arising from the pandemic and longer-term remote work.  

Employers should also continue to adhere to their statutory and common law obligations in relation to implementing performance management and termination processes, to the extent reasonably practicable in the context of the pandemic. 

When it’s not reasonably practicable to do so, employers should attempt to replicate existing processes as much as possible while maintaining an overarching focus on ensuring procedural fairness. 

Understanding the important legal considerations is just part of the virtual performance management process. Equally important is knowing how to tweak your approach to cater to a changing environment. Stay tuned for an article from HRM in the following weeks unpacking the practical side of virtual performance management.

Amy Zhang is the Executive Counsel & Team Leader at Harmers Workplace Lawyers.

Understanding the legal side of emerging workplace practices, such as virtual performance management, can be challenging. Ensure you’re up to speed by taking AHRI’s Introduction to HR Law short course. Sign up for the next course on 22 November 2021.