Employee Warning Letter & PIP | s.387 Fair Work Act

A written warning is a formal notice from an employer telling an employee that identified performance or conduct falls below the required standard and that continued failure puts their employment at risk. A performance improvement plan (PIP) is the operational companion : it converts the warning into measurable objectives, review dates, support commitments and a defined review period. The two documents work together. A warning without a plan tells the employee they have a problem but not how to fix it. A plan without a warning leaves them unaware that their job is on the line, which is exactly the gap the Commission exploits when it finds a dismissal harsh, unjust or unreasonable.

Australian practitioners distinguish these from three neighbouring documents. A counselling record or file note documents an informal conversation and carries no jeopardy language, so it rarely counts as a warning under s.387(e). A show cause letter puts allegations to an employee and demands a response before a decision, usually in a misconduct investigation rather than a performance cycle. A termination letter ends the relationship and belongs to the Australian employment document range at the other end of the process. The warning letter is the only one of the four that must expressly state that dismissal may follow. Case law is consistent : a warning that fails to convey jeopardy is treated as feedback, not a warning, and the employer loses the benefit of it entirely.

Australian performance management is not governed by a standalone statute. It sits inside the unfair dismissal architecture of the Fair Work Act 2009 (Cth), and the practical rules come from how the Fair Work Commission applies that architecture after the event. Section 387 lists the criteria the Commission must take into account when deciding whether a dismissal was harsh, unjust or unreasonable : whether there was a valid reason related to the person's capacity or conduct, whether the person was notified of that reason, whether they were given an opportunity to respond, whether the employer unreasonably refused a support person at discussions relating to dismissal, and, where the dismissal related to unsatisfactory performance, whether the person had been warned about that performance before the dismissal. The Commission also weighs the size of the employer's enterprise and the effect that has on the procedures followed. Every one of those limbs is evidenced, or not, by paperwork.

The s.387(e) limb is the reason this document exists. Unsatisfactory performance is more likely to relate to an employee's capacity to do the job than to their conduct, and the Commission must consider whether there was a period of time between the warning and the subsequent dismissal. That timing point is why a PIP with a stated review period matters more than the warning letter's tone. A four week plan that ends the day the termination letter is signed reads as theatre.

Small employers sit under a parallel regime. Where a small business employer dismisses someone, the person has not been unfairly dismissed if the Commission is satisfied the dismissal was consistent with the Small Business Fair Dismissal Code, and an employer is a small business employer if it employs fewer than 15 employees by head count, counting regular casuals. If an employee claims unfair dismissal, the employer must prove it complied with the Code. Where the reason does not warrant summary dismissal, poor performance being the classic case, the employer must first give a written or verbal warning that the employee is at risk of dismissal if conduct or capacity does not improve. In Puri v Sydney Strata Pty Limited [2012] FWA 7317 a rectification period of under three weeks was accepted as sufficient, though sufficiency turns on the circumstances of each case. The Fair Work Ombudsman publishes the operative guidance in its unfair dismissal and performance management resources for employers. Modern awards and enterprise agreements may layer additional consultation or dispute steps on top, and those override nothing in the Act but bind the employer contractually.

The standard trigger is a recurring performance shortfall that informal coaching has not shifted. A sales consultant misses quota across two quarters, a payroll officer keeps producing errors that others have to unwind, a technician's job completion rate sits well below the team. Once you have raised it verbally twice and nothing has changed, the next conversation should be documented, because the third informal chat is worth nothing in front of the Commission.

Conduct matters that fall short of serious misconduct occupy the second bracket. Chronic lateness, refusal to follow reasonable and lawful directions, breaches of a social media or workplace policy, low level rudeness to colleagues. Serious misconduct under the Code covers theft, fraud, violence and serious breaches of occupational health and safety procedures, and those warrant summary dismissal rather than a warning. Everything below that line runs through the warning process. If you are unsure which side of it you are on, warn.

A third scenario catches employers by surprise : the employee who was hired into the wrong role. Capacity gaps that emerge after probation still need a PIP, because you cannot dismiss for underperformance you never named. Restructures and role changes create a similar trap, where an employee is measured against a scope they were never told about. Two edge cases deserve flagging. An employee on a PIP who lodges a bullying, discrimination or workplace health and safety complaint immediately raises adverse action risk under Part 3-1 of the Act, and the burden of proving the plan was not a response to the complaint falls on the employer. Second, where underperformance is linked to a medical condition or disability, a PIP that ignores reasonable adjustments walks straight into a general protections claim. In both situations the plan still proceeds, but the documentation has to show the causal chain was performance and only performance.

• The statement of the specific concern replaces vague labels like "attitude" or "not meeting expectations" with dated, observable facts. Our template forces a description of what happened, when, and against which standard, because the Commission tests whether the employee was notified of the reason for dismissal under s.387(b), and an unspecific warning fails that test.
• The measurable improvement objectives section builds the PIP core. Each objective carries a metric, a target and a deadline, phrased so that a third party could tell on the review date whether it was met. Subjective goals are the single biggest weakness in employer files.
• The review period and check-in schedule sets the calendar : commencement date, interim review points, and the final review date. This is what evidences the interval between warning and dismissal that s.387(e) case law requires.
• The support and resources commitment records what the employer will provide, such as training, mentoring, revised workload or system access. Australian tribunals read a plan with no employer obligations as a paper trail for a decision already made.
• The support person notice informs the employee they may bring a support person to the meeting. Refusing that request unreasonably is a standalone criterion under s.387(d), and the invitation costs nothing.
• The consequences statement spells out that failure to meet the objectives may result in further disciplinary action up to and including termination of employment. Without this sentence the document is coaching, not a warning.
• The acknowledgement and employee response block captures the signature or a note of refusal to sign, plus space for the employee's written comments, which discharges the opportunity to respond under s.387(c).

New South Wales, Victoria, Queensland, South Australia, Tasmania and the Northern Territory operate under the national workplace relations system for all private sector employers, so the Fair Work Act 2009 (Cth) framework applies without modification. Victoria referred its industrial relations powers to the Commonwealth in 1996 and the others followed through referral legislation, meaning a warning letter drafted to s.387 standards works identically in Melbourne and Darwin. The practical variation sits in state work health and safety statutes, which matter when underperformance intersects with psychosocial hazards. Victoria remains outside the harmonised WHS scheme and applies the Occupational Health and Safety Act 2004 (Vic), while the harmonised jurisdictions run Codes of Practice on managing psychosocial hazards that treat poorly handled performance management as a recognised risk factor.

Western Australia is the exception that catches interstate employers. Sole traders, partnerships and unincorporated entities in WA fall outside the national system and sit under the Industrial Relations Act 1979 (WA), with unfair dismissal claims heard by the Western Australian Industrial Relations Commission rather than the FWC. Before issuing a warning to a WA employee, confirm whether the employing entity is a constitutional corporation, because the claim pathway, the time limits and the compensation cap all change. Pty Ltd employers in Perth are national system employers and use the standard template unchanged.

The Australian Capital Territory is fully within the national system, and territory public sector employment adds enterprise agreement procedures that typically prescribe formal underperformance stages with mandated notice periods. Public sector employers across every jurisdiction face the same layering : the Public Sector Management Act 1994 (WA), the Government Sector Employment Act 2013 (NSW) and their equivalents impose procedural steps that sit above the statutory floor. Where an enterprise agreement prescribes a specific warning sequence, that sequence becomes contractually binding and departing from it supplies the employee with a breach argument independent of any unfair dismissal claim.

You start by identifying the employer entity and the employee, including position, manager and commencement date, since length of service feeds directly into the minimum employment period and the remedies available. From there the form asks whether the matter concerns performance, conduct, or both, and adjusts the body language accordingly : a performance letter leans on measurable objectives, a conduct letter on the policy breached and the standard expected. You then enter the specific incidents with dates, and the template prompts you for the standard each one fell short of rather than accepting a bare description.

The PIP section builds itself from the objectives you enter, each one paired with a metric, a target and a review date. The template sets a default review period and lets you extend it where the role's cycle demands more time, then generates the check-in schedule automatically. Next you record the support the business will provide and confirm the support person invitation. A final block captures whether this is a first, second or final warning, which controls the escalation language and the strength of the consequences statement. You download the result in Word to adapt the wording to your policy, or in PDF for signature and filing, and it belongs on the employee's personnel file the same day. Related paperwork sits in the Australian legal document catalogue.

The most damaging error is the warning that never mentions dismissal. Managers soften the letter to preserve the relationship, and the Commission then finds the employee was never told their job was at risk, which strips the employer of the s.387(e) protection entirely. Running a close second is the PIP with unmeasurable objectives : "improve communication with the team" cannot be assessed, so a dismissal based on failing it looks arbitrary. The third pattern is the compressed timeline, where a four week plan is terminated at week two because the manager has lost patience. The Commission examines whether the employer gave sufficient time for the employee to rectify the problem, and abandoning your own timeframe is an admission that the outcome was fixed.

Employers also stumble on the response. A letter handed over at 4pm with a demand for a signature on the spot denies the opportunity to respond under s.387(c), and refusing a support person because "it's only a chat" is an unreasonable refusal under s.387(d) if dismissal is genuinely on the table. Then there is the file that goes cold : a warning issued eight months ago, never followed up, revived to justify a dismissal today. Stale warnings carry almost no weight. Finally, do not use a PIP to manage out an employee whose real problem is a personality clash or a recent complaint, because Part 3-1 reverses the onus and the employer has to prove the plan was not retaliatory. Employers structuring roles around these risks often revisit the underlying contract in the Australian business agreement templates.