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Poor Performance or Misconduct? How to Tell the Difference

Poor performance and misconduct can be difficult to manage in the workplace and even more so when it comes to letting your employee go. Despite both being grounds to terminate an employee, in practice they look very different. In this article, we’ll discuss the difference between poor performance and misconduct, including how employers should go about taking action.

Poor performance

When you hire an employee, you probably have a pretty clear idea of the work you expect to see from them. This can be discerned through setting Key Performance Indicators (KPIs) or reviewing the quality and timeliness of the projects you assign. Poor performance, put simply, is when these expectations aren’t being met. Employment contracts usually have clause outlining the duties involved in a certain job. When your employee isn’t fulfilling these requirements, it can be a cause for concern. However, if want to terminate your employee for poor performance, you have to make sure you go about it the right way.

Termination for poor performance

Terminating an employee for poor performance without following the right process may give rise to an unfair dismissal claim. To protect yourself, it’s important to have a performance management policy in place. Your policy should outline the process for how you deal with poor performance. This can include things such as:

  • Clearly outlining the expectations of employees
  • Conducting regular reviews with your employees to monitor performance
  • Having a conversation where an employee isn’t performing to standard
  • Issuing a warning letter before terminating your employee
  • Issuing a letter upon terminating an employee for poor performance

When you terminate an employee for poor performance, you also need to give them notice and pay out any leave owing to them. If you are terminating an employee who works on a casual basis or is still on probation, then termination can have immediate effect.

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Misconduct is of a far more serious nature than poor performance. This occurs where an employee engages in behaviour which results or could have resulted in serious harm to the business or other employees. Some common examples of misconduct include:

  • Assault
  • Fraud
  • Stealing
  • Intoxication on the job

Termination for misconduct

When terminating an employee for misconduct, you do not have to give notice. Despite this, you should always provide reasons for the termination and have it set out in writing. You will also still have to pay any leave entitlements owing to the employee such as annual or long service leave.


The key difference between poor performance and misconduct is the employee’s own role within it. There are many reasons why your employee may not be performing up to scratch, such as personal issues, lack of training or lack of skill. However, misconduct denotes that the employee has acted in a reckless or risky way which jeopardises your business or other employees. Yet whichever situation it is, it’s important to take the necessary precautions and ensure that termination isn’t harsh, unjust or unreasonable. If you have further questions in relation to termination, it may be worth getting in touch with an employment lawyer.

Don’t know where to start? Contact us on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest lawyer marketplace.

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