Australia: Resisting performance management: when is dismissal justified?

Background

Fair Work Australia ('FWA') recently heard a case brought by an employee who was sacked for refusing to sign a Performance Management Plan or participate in performance management discussions.

Mr Frank Moretti ('Mr Moretti') brought unfair dismissal proceedings against his employer HJ Heinz Company Australia Ltd ('Heinz') asserting that his termination was harsh, unjust, unreasonable and unfair.

The facts

At the time of the dismissal, Mr Moretti had been an employee of Heinz for approximately 28 years and had held the role of Western Australian Field Sales Manager within Heinz from about 1990, a period of 21 years.

In May 2011, Mr Moretti underwent an annual performance review. He also raised concern and reported allegations about improper conduct of one of his subordinate colleagues to his manager at head office.

A series of meetings followed these events. The first meeting took place in June 2011.

FWA accepted the applicant's evidence as to what transpired at that meeting.

The meeting took place between Mr Moretti and Mr Patterson (General Manager of Retail Sales). Mr Patterson informed Mr Moretti that the:

When Mr Moretti questioned how long they had felt this way; he was informed that they had harboured such feelings for quite some time and he was subsequently told by Mr Patterson that: 'there is no job for you here anymore...you need to resign.'

Shortly after this meeting, Mr Moretti was told by Mr Patterson that he would be 'performance managed out.'

In July and August, Mr Moretti attended a series of meetings at the request of Heinz. Throughout these meetings, Mr Moretti was informed that Heinz held performance concerns and that he would need to be put on a 'performance improvement plan.' Mr Moretti was notified by email that if he did not:

Mr Moretti refused to participate in discussions surrounding his performance and further refused to sign the performance improvement plan as he was of the view that the process was '[leading toward] a pre-determined outcome of dismissal,' particularly in light of Mr Patterson's earlier comments that he would 'performance manage [him] out.'

Mr Moretti's refusal led to his termination in August 2011.

The decision

FWA agreed with Mr Moretti's view that the performance management discussions and plan were 'the first step out the door' and said '[Mr] Moretti had good reason for that suspicion...he had not been subjected to any performance plans of this nature in the past, no other managers were being subjected to performance plans.'

At the hearing Heinz argued that Mr Moretti was being put on a performance improvement plan as a result of having attained a low score in an area of the annual performance review referred to as Goal 1, which was undertaken in May 2011.

However, the same low score that was recorded Mr Moretti's annual performance review was also recorded for every other employee of Heinz. Accordingly FWA said '[this] could not be a justifiable reason or even part of a reason for the development of a [performance improvement] plan.'

Accordingly, FWA found that there was no valid reason for dismissal and said that '[Heinz could have taken] alternative actions' to deal with Mr Moretti's refusal other than dismissal.

Mr Moretti sought re-instatement but could not be re-instated to the position he held before the dismissal as that position was now being filled by another person who was externally recruited by Heinz. As an alternative, FWA ordered Heinz to reinstate Mr Moretti 'to another position on terms and conditions no less favourable than those which he was employed under immediately before the dismissal.' FWA further ordered that Heinz pay Mr Moretti his remuneration from the date of his dismissal to the date he was to be reinstated.

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