By Annabel Rees, Businessary Managing Director

Sometimes workers’ compensation claims don’t go the way employers might like.

This is when it’s a good time to have a look at performance management.

Now, this can tend to freak employers out. You know, am I going to do this correctly? Am I going to push the worker away instead of getting the results that I’m looking for?

However, while it is a tricky area, it’s something that deserves a lot of attention. It’s an area that we really encourage you to not avoid. Like a lot of things, doing nothing can actually make a statement to your people as much or more than taking action would.

So while it might feel like the easy way out is to park that person and think ‘well, there’s some performance management issues here, but I don’t want to touch it as it’s a bit complicated and I might get it wrong’, you could be doing more damage by sending messages to the worker (and their colleagues) that it’s okay to be underperforming.

Or equally, you can be sending a message to your worker that says you’re too hard and if I’m an injured worker I can take that quite personally. That can then aggravate and extend time off work.

It sounds really simple but it’s really important to be quite clear on how you define underperformance. Because those are the factors that you’re going to come back to when you’re actually referencing specific underperformance.

Being unhappy with the worker or thinking ‘I’m really frustrated because they’re not coming back to work or doing things that I want’ isn’t enough when we’re talking about underperformance.

Triggers for performance management

Performance management is generally initiated due to under performance. As defined by FairWorkAustralia, underperformance is:

• Unsatisfactory work performance, that is, a failure to perform the duties of the position or to perform them to the standard required
• Non-compliance with workplace policies, rules or procedures
• Unacceptable behaviour in the workplace
• Disruptive or negative behaviour that impacts on co-workers

We need to be quite clear and talk about unsatisfactory work performance. The employee is failing to meet the expectations of the role requirements. There’s been unacceptable behaviour. Sometimes you can see workers that actually go out of their way to behave badly because they know that that might make them a bit too hard to handle.

But this is where you can use your code of conduct and use your values to be quite clear about your expectations around bad workplace behaviour and negative behaviour that might be impacting other workers. Those are the things that you want to able to reference when you’re talking about underperformance.

Misconduct

Another time where you might be looking at underperformance is misconduct.

Underperformance is not the same as misconduct. Misconduct is very serious behaviour such as theft or assault which may warrant instant dismissal. In cases of misconduct, employers should seek specific advice about how to proceed before taking any action.

This is where you might be in a position to have an immediate termination. There is a different set of processes from an HR perspective when talking about misconduct. But for now, we’re just going to talk about garden-variety underperformance.

Performance managing an employee on workers compensation

Can you performance manage an employee when they’re on WorkCover or they’re an injured worker? The short answer is yes. You can but you’ve got to do it correctly.

Steps to manage underperformance:

• Undertake a fair process. You’ve got to be fair and Fair Work Australia has a really clear outline of what a fair process is and it has to reference a process that is currently documented or within your workplace. You can’t just make it up as you go — it must be fair and reasonable. 
• Document, Document, Document! You need to be really clear about your documentation. You want to be able to document all the steps that you’re taking. You want to be able to communicate clearly with your worker. If nothing else, document, document, document. 
• Schedule separate meetings. Be quite deliberate about scheduling separate meetings for when you’re talking about the injury and return to work versus when you’re talking about underperformance and do not mix the two. You don’t want to bring someone in to talk about their injury and then tack it on the end and say, ‘Look, while we’re talking about that….’ That’s only going to end up in trouble. 
• Third party attendance. You need to be able to offer that injured worker the opportunity to have a third party or a support person in the room. The balance is sending a meeting invite at least 24 hours in advance that gives the person the chance to prepare and invite a support person without giving too much detail which may cause undue stress or derail process.
• Employers still need to be mindful of their workers’ compensation obligations:
  – You cannot direct an employee to attend work for the purposes of attending a performance management meeting if their treating doctor has certified them unfit for all duties.
  – In some cases, performance management may need to be delayed to a more appropriate time and undertaken in a sensitive manner.

When it comes to psychological injuries, that adds a whole level of complexity. Often there are manager issues or stress in the workplace issues, which does make it very difficult for that worker to feel comfortable coming in the workplace. But you can look at a third, independent location — e.g. a cafe or somewhere that the worker may be more comfortable — to have a formal meeting if they’re open to it and their treaters feel that that’s appropriate. Be open and be a bit creative about what type of environment you need to support the conversations you want to have. Be mindful that you might have to allow for pauses in this process. 

What if performance management triggers a claim?

• Employees may claim workers’ compensation for a number of reasons including stress and anxiety triggered by performance management.
  Sometimes we see an underperforming worker finding that they really don’t enjoy the process. They can see the end is nigh and there’s a meeting coming up that starts to look a little like it might be the last one. And all of a sudden, as a manager, you find a WorkCover certificate on your desk and a text message from my worker saying they’re unfit for two weeks from stress or anxiety.
• This may delay your process but don’t let it derail it! This is your opportunity to look at halting that claim and being able to prove to your insurer that reasonable management action was taken and that that doesn’t mean that you aren’t allowed to take that reasonable management action around other performance.
• Ensure that your workers’ compensation insurer is informed where you suspect an employee’s claim has resulted from ‘reasonable management action’, but stay focused on the operations of the business.
• As an employer you are well within your rights to take ‘reasonable management action’ to ensure an employee fulfils the inherent requirements of their role.

You absolutely can continue performance management. But, again, you might have to pause and work through an investigation or work through their allegation to be able to progress into performance management.

Reasonable management action

You absolutely have the right to performance manage an employee. If I as an employer feel they’re not meeting the role requirements and then likewise inherent requirements to the role. Being really clear on those two are your most important facts when you’re looking at being able to performance manage a person.

Can I terminate?

There are several pieces of legislation protecting employees on workers compensation from being terminated. However, demonstrating procedural fairness is the key.

Under s352 of the Fair Work Act, an employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury.

Termination can take place as long as the employer demonstrates procedural fairness by:

1. Investigating an employee’s future capacity
2. Inviting the employee to respond to being unable to fulfil the inherent requirements of their role
3. Requesting (where necessary) for medical evidence
4. Showing reasonable adjustments were made but were unsuccessful in achieving suitable performance outcomes
5. Consulting with the employee in case of a potential redundancy and demonstrating a genuine structural/operational adjustment.

You need to be clear and precise in gathering your facts and having all your information, working closely with your underwriter so that you are comfortable that you’ve worked your way through all the options.

What can you do today?

Not having that correct processes in place in the first place makes it quite difficult when the claim does arise. Here are some things you can implement today to make the process easier:

• Ensure there are relevant company policies and/or guidelines in place 
• Nominate employees in key roles as per employer obligations and offer appropriate training and education 
• Ensure employees have read, understood and signed off on their obligations re: company policies, as well as performance expectation 
• Always ensure a fair, reasonable and consistent process is followed across the business — this should be your mantra 
• Check in with your workers’ compensation insurer to understand changes to legislation and/or obligations 
• Seek experts that can provide you with the right advice from a business operations and legislative perspective to ensure you are always one step ahead when managing people issues.

Annabel Rees is the Managing Director of Businessary, a team of HR Consultants in Melbourne who provide a range of HR, business advisory and marketing consulting services. 

Disclaimer: This article provides general advice and should not be considered legal advice or an insurance consultation. You should seek appropriate counsel for your own situation. In addition, this post is directed at people in Australia. If you are outside Australia, please be aware that the circumstances in your own country may be different.