It’s common practice to use warnings as an initial step towards eventual termination of employment. Warnings make it clear to employees that there are problems, while also providing them with an opportunity to improve and thus avoid dismissal. They are an integral part of fairness in any disciplinary procedure. 

This does not mean that one or more warnings are mandatory to provide procedural fairness. The individual circumstances of each case will differ, but warnings are regarded as good practice when an employee’s performance or conduct is significantly unsatisfactory. 

The Fair Work Commission, when determining whether a dismissal is unfair, may also consider whether the employee received any warnings. The Fair Work Act (s 387(e)) also outlines the criteria for determining whether a dismissal is harsh. 

 

Types of warnings 

The following is a typical sequence of warnings. Keep in mind, however, that it is not always appropriate – for example, in cases involving serious incidents, a final warning might be given. 

1. Verbal warning — This involves providing specific details of the deficiency in performance or conduct, along with the standard of performance or conduct required. Although the warning itself is verbal, documentation by the manager who issues it is still required. Ideally, the warning should be issued in the presence of witnesses (one on behalf of the manager and one on behalf of the employee). 

Official verbal warnings are not that common, and most managers prefer to start the process with step 2 below. 

2. First written warning — The steps are similar to those above, whereby the deficiencies and required standards are both explained, the matter is documented, and witnesses are present. However, the following extra steps also apply: 

A copy of the warning is prepared, signed by all parties, given to the employee, and another copy is placed on their employment record. 

If the employee refuses to sign the warning, they should still receive a copy, and the warning will still be placed on their employment record. 

The warning may establish a period for improvement to occur and for performance or conduct to be reviewed again. When that period expires, the warning may either cease to have effect or a second (and usually final) warning may be issued (see further discussion below). 

Where performance or conduct involves a breach of company policy or procedure, state the relevant policy or procedure and provide the employee with a copy of it. This step is particularly relevant to cases involving misconduct. 

3. Second written warning — A second written warning is not necessarily or commonly provided — it is more usual to proceed to a final written warning — but could be appropriate in the following circumstances: 

The employee’s performance conduct is not yet at the required standard, but the previous warning set a deadline or date for review. There has been significant improvement since then, and there is a chance that performance and conduct will eventually reach the required standard. 

There has been a lengthy period since the first warning was issued, well beyond the deadline or review date it had set. In such cases, it is advisable to set a shorter time frame for the second warning. 

Otherwise, the procedural steps are the same as for the first written warning. 

4. Final written warning — This step applies if performance/conduct fails to improve, does not improve to a sufficient extent, or there are recurrences of misconduct. The procedural steps are similar to those for 2 and 3 above, except that the warning must clearly state that if performance or conduct does not improve to an acceptable level by a specified date, employment will be terminated. 

 

What should a written warning contain? 

Details of the performance or conduct deficiency, stated in specific behavioural terms, for example, details of the employee’s absenteeism record. 

Reference to relevant company policies or procedures, where the performance/conduct involves a breach of them, and a specific description of the breach(s). 

  • Details of corrective action required by the employee. 
  • Time frame — either a deadline for improvement or a date on which performance will be reviewed again. 
  • State the intended action if performance/conduct does not improve to a satisfactory level, e.g., termination of employment. 
  • Reference to types and dates of any previous warnings or other disciplinary action 
  • Date, names of witnesses, signature of employee (if obtainable), manager and witnesses.

 

How long should a warning last? 

When setting a date for review, the seriousness of the problem and the length of time it has been apparent will determine the appropriate length of a warning. Between one and six months is usually appropriate, but this timeframe may vary depending on the circumstances. For example, in cases of absenteeism, a shorter review period typically applies to new employees and those with a history of chronic absenteeism. 

If an employee reaches the review date without any recurrences and their performance is satisfactory, the warning should be withdrawn, and the employee’s slate should be regarded as 'clean'. 

Although a copy could remain on the employee’s record, it is unlikely that an employer could rely on it even if problems recurred some time later. 

For example, if a warning was applied for three months and the employee’s performance and conduct remained satisfactory for 12 months before problems recurred, the most appropriate step would usually be to issue another 'first warning'. Although the warning could refer to the previous one, terminating employment without first issuing another warning could be regarded by a court or tribunal as procedurally unfair, making it difficult to defend a claim of unfair dismissal. 

 

Procedural fairness

In the case of warnings, this will involve thoroughly investigating the matter, clearly stating the problems, giving the employee an opportunity to respond to the allegations, taking any mitigating circumstances into account, and allowing the employee to have representation or a witness present when the issues are discussed. 

Be wary about giving more than one 'final warning'. It may be tempting to do so if an employee continues to show some improvement without reaching the required standards, or if the problems are sporadic rather than ongoing. Repeated 'final warnings' tend to reduce the impact of all warnings and may be perceived by others as inconsistent behaviour by the employer. 

Where the organisation has a policy or procedure covering the issue of warnings, ensure that it is not too rigid, e.g. it prescribes a first and final warning every time. The policy should state that the number and/or timing of warnings will depend on the severity of the problems, allowing for expedited processing in serious cases. In cases involving serious misconduct, there may be no warning process, and dismissal may be the only step. 

 

Issuing warnings is a critical component of managing employee performance, but in some cases, termination may ultimately be required. To navigate this complex process with confidence, join our upcoming Terminations: Your questions answered webinar, where an employment law expert will guide you through fair and lawful dismissal practices.