The myth of the three warnings: What’s required in a dismissal process?

The ‘three warnings’ rule is one of the most common misconceptions in employment law. It simply does not exist.

The reality is there is no general rule that employers must issue three warning before an employee can be dismissed.

If there was, it would be a dream for employees — they could do whatever they wanted on two occasions before they had to amend their behaviour.

Even with performance-based dismissals, there is no ‘three strikes’ rule. However, employers also do not have free reign.

The starting point in assessing whether an employer can dismiss an employee is the employment contract.

If the contract requires the employer to follow a dismissal process (which could require the issuing of warnings) then it must be followed. However, employment contract rarely implement these measures.

More commonly, employment contracts simply stipulate the amount of notice required to be provided in the event of termination.

Given that contracts rarely require warnings, an employee must look to unfair dismissal for any requirements in a dismissal process.

However, not all employees qualify for unfair dismissal protections.

Employees dismissed for performance or conduct reasons still need to have completed six months’ service (or 12 months if their employer is a small business with fewer than 15 employees) and earn under the high-income threshold (or be covered by a modern award or enterprise agreement).

Assuming an employee is entitled to unfair dismissal protections, the only reference to a warning is in the criteria for determining harshness contained in section 387 of the Fair Work Act 2009 (Cth) and even that is only a consideration.

The commission is directed to “take into account …if the dismissal related to unsatisfactory performance by the person — whether the person had been warned about that unsatisfactory performance before the dismissal”.

Importantly, whether an employee was warned appears to only be relevant in a performance dismissal and even then it is only a consideration.

There certainly is no requirement for several warnings, and there is no distinction between written or verbal warnings (although written warnings are stronger from an evidentiary perspective).

Even though there is no strict requirement for multiple warnings employers do not necessarily have a free hand.

There are several factors to consider in an unfair dismissal case, including whether there was a ‘valid reason’, and other procedural considerations, such as whether the request for a support person was refused.

If an employer has dismissed an employee for performance or conduct reasons, the existence of multiple, reasonable warnings will certainly aid in the defence of an application.

Further, if there is a disciplinary policy that has been complied with, the employer will have strengthened their case, and similarly, the application is more likely to succeed if a policy was not adhered to.

So while there is no general requirement for three warnings, or in most cases for any warnings, each case will be assessed on its particular facts and employers will be served by having provided a couple of strikes before proceeding with any dismissal.