Don’t Confuse Poor Performance and Misconduct

A crucial element of a fair dismissal is that there are good grounds to dismiss.

Employment lawyers like me tend to talk a lot about ensuring you have a fair process.

Yet you can have a perfect process and still unfairly dismiss your employee if you didn’t have good reasons to terminate their employment in the first place.

What are good grounds to dismiss?

If someone came up with a perfect formula to define this, they would make a lot of money. The reality is, evaluating what is fair and reasonable in any particular case is a judgment call.

Nevertheless, there are several categories of reasons that have been regarded as fair in appropriate circumstances, including:

  • where the employee misbehaves badly;
  • where the employee’s performance is below par;
  • where the employee is incompatible with other staff;
  • where the employee is medically unable to perform their role; and
  • where the employee is no longer needed because their role is redundant.

If we set aside those reasons for dismissal where the employee is not at fault (e.g. redundancy or medical reasons), the two primary grounds for why an employee is dismissed is that they have either (1) not performed their job satisfactorily or (2) have misbehaved.

Misbehaviour and poor performance may seem like clearly different categories. However, the distinction between them can sometimes be difficult to draw.

It is important not to get them confused because the type of reason you are relying on dictates what you must do to ensure a fair process.


Misconduct issues, or misbehaviour issues, are those where the employee has done something that you can consider to be “naughty”.

Examples include:

  • stealing from the till;
  • lying;
  • fighting with other staff; or
  • harassing other staff

The above examples have nothing to do with the employee’s performance of their duties. They are outside their duties altogether.

They may be very good staff in all other respects and meet your performance expectations. You may consider them to be star employees in so far as they carry out their duties. But ultimately, their behaviour is unacceptable and reduces your ability to trust them.

The consequence for misconduct is that the employee can be dismissed, whether after a series of warnings, or in the case of the most serious misconduct, immediately without any period of notice.

You can take steps to dismiss them with or without notice, provided you have given the employee a fair opportunity to be heard in response to the allegations and you have considered what they had to say before making your decision.
 (For more details on the process, see this step-by-step guide.)


Poor performance is where you consider that the employee is not meeting your expectations in their role. They may be very pleasant, well-behaved, and entirely trustworthy, but they cannot do their job in the way that you require.

A fair process in the context of poor performance demands a very different approach to what you are required to do when addressing misconduct.

Before dismissing an employee for poor performance, you must have given them the opportunity to know what your concerns about their performance were, and a reasonable opportunity to improve and demonstrate that they can meet your expectations.

That often means resorting to a period of weeks or months during which you implement a plan to improve their performance, including ongoing collaboration, training and feedback. That way the employee is under no illusions about their progress towards their performance goals.

Only if the employee continues to fail to meet your expectations after that period of performance management can you be in a position to fairly dismiss.
 (Again, for more details on the process, see this step-by-step guide.)


Many employers find the process of monitoring an employee’s performance draining.

In your heart of hearts, you may not feel as though the employee is capable of improving their performance to a degree that will cause you to retain them.

If you feel that impatience welling up, you may be tempted to re-characterise the performance issue as a misconduct issue.

Why? Because if the issue is one of serious misbehaviour, you can dismiss the employee immediately, which allows you to avoid the intensive process of monitoring the employee’s performance over a period of time.

Be warned, however: as the Employment Court has said, treating a genuine performance issue as though it were a matter of misconduct entails the risk of acting unfairly.

You can now see why that is so: a fair process relating to poor performance includes the opportunity for the employee to improve. If you simply dismiss without affording the employee that opportunity, you have short-circuited the process.


Sometimes it will not be clear to you whether the conduct complained of is misbehaviour or poor performance.

This is particularly so in cases where the employee’s performance is so bad that it can be said to be grossly negligent. By that, I mean they have done something that was so clearly wrong, even though they were not intentionally disobedient.

In those cases, a single act of carelessness, if sufficiently serious, can lead an employer to justifiably conclude that they cannot trust the employee any longer.

Examples where this happened include:

  • where an employee used a metal bar and a hammer on an expensive die to free some stuck plastic, causing severe damage to the die and significant cost to his employer; and
  • where a journalist failed to check that a photograph was actually the gang leader he thought it was, and had the person photographed incorrectly described as such in the NZ Herald.

However, these cases are rare. If in doubt, treat the performance issue as what it is and give the employee a fair opportunity to improve before moving to dismiss.


Be clear from the outset what it is about the employee’s behaviour that is concerning you.

Is it their failure to do their job? Or are they doing their job just fine but display issues of bad behaviour leading you to distrust them?

Categorising the type of issue that you need to address at the outset is crucial because it sends you down a path of addressing the misconduct or performance in distinct ways.

Fairness is not just about following a process, but applying the right process to the concern that you have about your employee.

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