Australia: Performance management plans used to facilitate dismissals

Performance management plans (PIPs) are increasingly being utilized in Australia as a mechanism to facilitate employee dismissals while attempting to comply with unfair dismissal laws. While originally intended to help workers improve their performance, legal experts suggest they are often used as a “tick-the-box exercise” to justify terminations.

A notable case involved mechanic Yep Yap, who was dismissed by Club Assist after failing to meet three key performance indicators. The Fair Work Commission later ruled that the targets set for Yap were “unrealistic, unachievable and improper,” resulting in his reinstatement with back pay.

Joydeep Hor of the employment law firm People + Culture Strategies notes that while there is no strict legal requirement to implement a PIP before termination, the absence of one can lead to legal scrutiny regarding the fairness of a dismissal.