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Norman Waterhouse

When and how should employers seek to use formal performance review procedures to resolve performance issues with employees?

In Lees v Asaleo Personal Care [2021] FedCFamC2G 347, the Federal Circuit and Family Court of Australia (the Court) found that Asaleo Personal Care (Asaleo) took adverse action against Mr Lees contrary to section 340 of the Fair Work Act 2009 (Cth) (FW Act) by:

  • presenting him with a performance improvement plan (PIP); and
  • terminating his employment on grounds of misconduct after he refused to participate in the PIP process.


Mr Lees was an employee of Asaleo, a multinational personal care and hygiene company. Mr Lees was employed by Asaleo from 20 October 2014 until 12 March 2020, when his employment was terminated on the grounds of misconduct. At the time of his dismissal, Mr Lees was engaged as a Sourcing Manager.

Mr Lees’ employment relationship with Asaleo began to sour following a business restructure, when the sale of Asaleo’s Australian Consumer Tissue Business took place in March 2019. Following the sale, Asaleo restructured its procurement function, ultimately resulting in Mr Lees making a complaint, seeking a ‘formal redundancy’, as he believed there had been substantial changes to his position. Asaleo promptly reassured Mr Lees that his position had not been made redundant.

Following this, Mr Lees made a further six complaints in relation to his employment between the periods of July 2019 and March 2020, raising concerns with his management team regarding workplace bullying, as well as issues concerning the handling of an inappropriately worded email Mr Lees had sent to a junior employee.

In addition to these complaints, Mr Lees also filed an application for an Order to Stop Bullying in the Fair Work Commission, which was ultimately resolved in November 2019. The terms of settlement included the provision of training for executives and the facilitation of a discussion with Mr Lees regarding his role and performance expectations.

Mr Lees was issued with a draft PIP following his sixth workplace complaint. This complaint raised concerns about the handling of an incident following an email he sent to a junior employee, which Asaleo considered to be inappropriate.

Asaleo had planned to consider the draft PIP with Mr Lees in an upcoming meeting. However, before the meeting could occur, Mr Lees informed Asaleo’s management team that he would be refusing to participate in the PIP process. This refusal ultimately formed the basis for his dismissal on the grounds of misconduct effective 12 March 2020. Mr Lees was paid 2 months’ pay as notice in lieu of service.

Mr Lees subsequently filed an adverse action claim with the Court, as well as a claim for a redundancy payment and claims for breaches of his employment contract on the basis of Asaleo failing to conduct annual performance reviews or providing him with the opportunity to participate in the bonus scheme.


In adverse action claims, there is a reverse onus of proof. As such, Asaleo were required to prove that the adverse action taken was not for a prohibited reason.

There was no debate that Mr Lees had exercised workplace rights, and that his complaints had been made genuinely, in good faith and for a proper purpose. Asaleo denied that the presentation of a draft PIP constituted adverse action. However, the Court concluded that by being presented with the draft PIP, Mr Lees’ position ‘had been altered to his prejudice’. The Court also accepted that the draft PIP had likely set Mr Lees up for dismissal, and was therefore willing to determine its issuance as a real and substantial alteration of his position. It was subsequently ruled that the presentation of the draft PIP to Mr Lees constituted adverse action.

Asaleo’s submission that they were required to present Mr Lees with the PIP on account of the terms of settlement of the Fair Work Commission action was ultimately rejected, with the Court determining that the terms of settlement did not contain provisions relating to the presentation of a PIP at all. This led to the ultimate determination that Asaleo had taken adverse action against Mr Lees for a prohibited reason by presenting him with the draft PIP.

The Court also determined that Asaleo took adverse action for a prohibited reason against Mr Lees in terminating his employment. The Court concluded that the contents of Mr Lees’ email to a junior member of staff, and the handling of the resulting incident did not warrant presenting him with a draft PIP. Additionally, the Court maintained that even if the incident had warranted the presentation of a draft PIP, Asaleo had a range of alternatives besides terminating Mr Lees’ employment when he chose not to partake in the process.

While Mr Lees’ claim for redundancy payment was not made out, nor was the aspect of his breach of contract claim insofar as it related to the opportunity to engage in a bonus scheme, the Court did find that Asaleo breached Mr Lees’ employment contract by failing to provide him with annual performance reviews.

The Court noted that the parties had agreed to address remedies in a separate hearing and made no mention of damages as a result.

Take Home Messages

Employers should properly consider and address the way they handle performance issues in the workplace. A formal performance review process should only be used to address genuine issues, and a reasonable timeframe should be provided to improve performance. Employers should seek to use their formal performance review processes only after other informal processes have been explored, and have failed to result in satisfactory performance.

Should you have any queries in relation to this article, please contact Sathish Dasan on +61 8 8210 1253 or, or Ganesh Krishnan on +61 8 8210 1395 or, or Anastasia Gravas on +61 8 8210 1331 or


3 February 2022



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