Dealing with curveballs

In HRNZ’s third in a series of articles on getting the basics right, Jack Rainbow, Associate at Dundas Street Employment Lawyers, outlines the importance of clear performance improvement processes.

Performance improvement processes can be one of the most challenging employment processes to undertake within any organisation. The necessarily lengthy nature of these processes, and the need for employers to be meticulous in documenting their concerns and the shortfalls in the employee’s performance, can itself strain the employment relationship, and create conditions where the employee feels unfairly treated, irrespective of how perfectly executed the process is.

WHAT IS A PERFORMANCE IMPROVEMENT PROCESS?

A performance improvement process may start where an employee is identified as falling below the expected performance standard for the role. Where this happens, a genuine attempt must be made to support that employee to improve their performance to a satisfactory level.

Generally, these processes start as informal check-ins and counselling to identify both performance gaps and what support the employee may need to be provided with to overcome those gaps. Eventually, a more formal process may begin where clear and defined expectations and timeframes are set, with more structured support being put in place. This is commonly referred to as a performance management process, a performance improvement process or a ‘PIP’.

Should performance continue to fall below the expected standard, formal sanctions (eg, a first written warning) may result. If the problem persists, subsequent warnings may be issued before an employer ultimately terminates employment on notice for non-performance.

Claims Of Bullying

To be carried out correctly, these processes call for transparency around the issues being identified, the potential outcomes for the employee, frequent meetings, and close scrutiny of the employee’s work. These conditions are inevitably inherently challenging for both the employer and the employee, and bullying claims are therefore not uncommon from employees who are subject to performance improvement processes.

Legitimate performance improvement processes, carried out fairly, are not bullying. WorkSafe’s definition of bullying specifically excludes ‘reasonable management actions delivered in a reasonable way’, constructive feedback, and setting high performance standards.

However, it is not enough to immediately dismiss the complaint as retaliatory. Where a claim of bullying has been raised against the employee’s manager who is running the process, an employer needs to consider the claim like it would any other complaint of bullying, to assess next steps. The employer’s policies will be integral to this assessment.

If there could be merit in the complaint, an employer will need to consider whether it should stop or pause the performance process and investigate.

Irrespective of whether the complaint has merit, it is generally a good idea to consider using another manager to continue the performance improvement process, where practicable. This may remove the requirement for a lengthy delay while the bullying claim is being dealt with.

It will also avoid claims at a later stage that the entire process was undermined because the manager was allegedly bullying the employee, or could not fairly assess the employee’s performance because they had been accused of bullying. If an investigation demonstrates that no bullying occurred, the previous manager may step back into the process.

Mental Health Concerns

Another common issue raised during performance improvement processes relates to the mental health of the employee and, specifically, claims of stress affecting the employee. Sometimes it’s that the stress is causing the poor performance; alternatively, it may be that the process itself is now causing the employee stress.

An employer must take all reasonably practicable steps to prevent or mitigate harm to their employees, including instances of mental harm. Failure to do so may result in a personal grievance and/or breach of contract claim for failing to provide a safe workplace.

Whenever issues regarding health are raised, it is important for an employer to attempt to obtain sufficient information, with the consent of the employee, to inform its next steps rather than rely on assumptions.

In the case of performance improvement processes, an employer will need to consider, based on medical information, whether the employee is able to continue with the process or whether it needs to be put on hold or adjusted.

An employer could consider engaging an appropriate medical practitioner to provide medical advice regarding whether the employee is fit to continue the process (or return to work at all if they are off work). If the employee declines to provide medical information or to see an appropriate medical practitioner, an employer can then consider next steps based on the information available.

Options for progression at this stage may include:

• proceed with the process if the medical advice is that the employee can safely participate

• review the performance improvement plan and if it needs to be amended based on the health issues identified

• consider what, if any, steps can be put in place to support the employee and reduce stress

• offer EAP and/or counselling

• pause the process if the employee is too unwell to engage, however, you may then want to consider whether a medical incapacity process is needed

• consider mediation as an avenue to engage with the employee to resolve matters.

Getting It Right

Employers undertaking performance improvement processes must be careful to consider, respond and address appropriately, any issues being raised by employees during the process. While it can be tempting to keep pressing on, properly managing and considering any issues that arise will be crucial to defending the performance improvement process, in the event a claim is raised.

CASE LAW EXAMPLE – FGH V RST

FGH v RST [2018] NZEmpC 60 is a good example of where issues relating to both health concerns and bullying allegations arose in the context of a performance improvement process.

The employee, Ms H, had been subject to a performance improvement process over a seven-month period. She suffered from ADD and was prone to anxiety, and made a complaint of bullying during the performance process.

The Court found that, although the approach to performance improvement was ‘tenacious’, “…it had not been unprofessional or hostile” and was not bullying: “… there is no doubt that Ms H found the intense supervision to be ‘unwanted’, ‘intimidating’ and ‘humiliating’, to use the language of the policy. However, unless legitimate criticisms were expressed in an unprofessional or hostile manner, they could not be described as ‘unwarranted’”.

However, although the employer had taken a significant number of steps to adjust their process to account for Ms H’s ADD and anxiety, it still fell short of its obligations given that Ms H’s health continued to be adversely affected. Specifically, it was found that the employer proceeded with its processes (both performance and disciplinary) without seeking adequate medical information in circumstances where Ms H was “…distraught, displaying obvious signs of heightened anxiety”. Ms H therefore had a personal grievance for unjustified disadvantage.

Jack Rainbow, Te Arawa (Tapuika), Ngāti Tūwharetoa, is an Associate at Dundas Street Employment Lawyers. Jack has strong experience in industrial relations, dispute resolution and providing high-level, strategic advice. He partners closely with his clients, providing advice and assistance from start to finish on a range of complex matters.