Last Updated on 19/09/2025 by Damin Murdock
Hospitality employers often face challenges in managing staff performance. Whether it is a waiter not providing the expected level of customer service, a barista consistently arriving late, or a chef failing to meet food quality standards, employers may consider dismissal as the ultimate step. However, dismissals for poor performance are one of the most common grounds for unfair dismissal claims before the Fair Work Commission. To manage performance issues effectively, hospitality employers need to understand the legal requirements and risks associated with termination for poor performance.
Legal Requirements and Considerations by Fair Work Commission
Valid Reason
Under the Fair Work Act 2009 (Cth), an employer must have a valid reason related to the employee’s capacity or conduct to dismiss lawfully. Poor performance falls under capacity, but a valid reason alone is not enough.
Fair Process
The Fair Work Commission will also consider whether the employer followed a fair process. This means the employee must be made aware of the performance concerns, given a genuine opportunity to respond, and allowed a reasonable period to improve.
Support
Employers are expected to provide support such as training, mentoring, or performance improvement plans.
Prior Warning
Warnings are particularly important. The Commission has consistently found that dismissals are unfair if no prior warnings are given. A written warning should clearly outline the deficiencies, specify the standards required, and warn that failure to improve may result in termination. Multiple warnings may be necessary depending on the severity of the performance issues.
Other Factors
Hospitality employers should also consider whether the employee’s performance problems are linked to other factors, such as inadequate training, lack of resources, or unreasonable expectations. If such factors exist, termination may be considered harsh.
Practical Steps For Employers
- conducting regular performance reviews,
- documenting issues and meetings, issuing formal warnings when necessary, and
- providing support to help employees improve.
If performance does not improve after these steps, dismissal may be justified. The risks of failing to follow due process are significant. Employers may face unfair dismissal claims resulting in reinstatement orders, compensation, and reputational harm.
Bottom Line
Dismissing an employee for poor performance in hospitality requires more than identifying shortcomings. Employers must follow a structured process that includes warnings, opportunities for improvement, and procedural fairness to minimise legal risks.
Feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube , LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favourable Google Review.
DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article and if you require specific legal advice, please contact us.
Damin Murdock (J.D | LL.M | BACS - Finance) is a seasoned commercial lawyer with over 17 years of experience, recognised as a trusted legal advisor and courtroom advocate who has built a formidable reputation for delivering strategic legal solutions across corporate, commercial, construction, and technology law. He has held senior leadership positions, including director of a national Australian law firm, principal lawyer of MurdockCheng Legal Practice, and Chief Legal Officer of Lawpath, Australia's largest legal technology platform. Throughout his career, Damin has personally advised more than 2,000 startups and SMEs, earning over 300 five-star reviews from satisfied clients who value his clear communication, commercial pragmatism, and in-depth legal knowledge. As an established legal thought leader, he has hosted over 100 webinars and legal videos that have attracted tens of thousands of views, reinforcing his trusted authority in both legal and business communities."
