Worker argues expected targets weren't part of her contract
The Fair Work Commission (FWC) recently dealt with an unfair dismissal application filed by a worker alleging that she was unfairly dismissed by her former employer, a company that sells timeshare, hotel packages, rooms, and tourist activities, primarily via telephone marketing. The dismissal was claimed to be within the meaning of s.385 of the Fair Work Act 2009 (Act).
The worker was employed as a "vacation specialist" from June 2021 to April 2023, and then as a "vacation planner" from April to August 2023.
The employer argued that the worker was dismissed for performance-related reasons, specifically her failure to meet key performance indicators (KPIs) over an extended period. The case centred around whether the dismissal was harsh, unjust, or unreasonable under the Act.
Background and context
The worker was initially engaged as a "vacation specialist," essentially a telemarketer role, where she was required to sell discounted short stays to previous guests of the employer's hotel group.
The worker's KPIs in this role were three sales per week, which were confirmed when the relevant contacted customer made a deposit for the discounted stay.
The employer had not strictly enforced the weekly KPI requirement, provided that sales averaged three per week over an extended period.
However, in February 2023, the employer started enforcing the three sales per week KPI more vigorously, causing some employees in the vacation specialist role to resign to avoid potential termination. The worker was then offered the "vacation planner" role in April 2023, which she accepted.
The new role involved locking in specific dates for guests who had made a deposit for a discounted short stay and securing any remaining monies owed beyond the initial deposit.
Parties’ arguments
The worker argued that she was told the vacation planner role would be "easy" and "cruisy" with no KPI pressures. However, after taking up the role, she claimed there was a lack of thorough training and that she had to learn new computer software programs with minimal support.
The worker also stated that she was given five KPIs to meet during a performance review meeting in June 2023, which were then doubled to 10 KPIs the following week.
The employer, through the evidence of the worker's supervisor, argued that KPIs and minimum performance standards were discussed during the worker's interview for the vacation planner role.
The supervisor also said that the worker undertook training for the role, which included step-by-step documents, listening to example sale call recordings, reviewing sales scripts, and ongoing screen sharing sessions.
The employer claimed that the worker received enough leads to reach the KPI of 10 activations per week and that the progressive disciplinary process was applied consistently across all employees with identified performance issues.
FWC’s findings
The FWC found that the real difficulty with the employer's asserted valid reason for the worker's dismissal was that it relied upon "asserted contractual terms that hold [no] force or effect."
It examined the worker’s contract and commission plan, and concluded:
"On the basis of the foregoing terms … I find that from a contractual and employment relationship perspective, there was no basis upon which the [the employer] had the lawful right to hold the [worker] to the performance standards set out … such that any failure to meet such performance standards could give rise to her discipline or dismissal."
The FWC further noted that "relying upon a requirement that has no basis in contract (as between the parties), to meet a specific number of KPIs is not a sound, defensible, or well-founded reason for dismissal."
The Commission found that the worker's dismissal was not for a valid reason, which weighed in favour of a finding that the dismissal was harsh, unjust, and unreasonable.
In conclusion, the FWC emphasised the importance of valid reasons for dismissal being based on sound contractual terms:
"In the facts and circumstances of this case, relying upon a requirement that has no basis in contract (as between the parties), to meet a specific number of KPIs is not a sound, defensible, or well-founded reason for dismissal."
The decision highlights the need for employers to ensure that performance standards and KPIs relied upon for disciplinary action or dismissal are clearly outlined in employment contracts or other binding agreements.
As the FWC stated:
"The words set out in [the worker’s contract] concerning [her] duties and responsibilities, in my view, do not extend to a requirement for the [worker] to comply with an incentive program (commission plan) that can be unilaterally amended by the [employer] at any time."
Ultimately, the FWC found that the worker's dismissal was harsh, unjust, and unreasonable, as the employer had relied on performance standards that were not part of the worker's employment contract.
