Unrealistic performance plans risk unfair dismissals, experts warn
A court ruled that a roadside mechanic’s performance targets were unattainable, forcing his employer to reinstate him with back pay, highlighting how PIPs can be misused.
In 2022, roadside mechanic Yep Yap was terminated after failing to meet three performance indicators, but a Fair Work Commission hearing determined the targets were unrealistic, ordering Club Assist to rehire him with back pay. Lawyers note that performance improvement plans, while intended to help underperforming staff, are often employed as a checklist to justify dismissals while staying within unfair-dismissal legislation.
Recent examples, such as a public-relations worker in Sydney who was given a 24-hour settlement window, illustrate how vague or unachievable KPIs can pressure employees and expose employers to legal and workplace-health liabilities. Specialists recommend employees ask for clear, measurable goals, keep detailed records of feedback and external factors, and consider legal advice if a plan appears punitive. Employers are urged to set transparent, reasonable targets, document discussions, and treat PIPs as collaborative improvement processes rather than exit strategies.
Why it matters
Misused performance plans can lead to unlawful dismissals and workplace stress, affecting both employees and employers.
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