'Poor cultural fit' no longer an excuse for employers

Of all the applications lodged annually, unfair dismissal claims and general protection claims involving dismissal continue to remain as one of the top two types of applications that the Fair Work Commission receives. These claims spiked significantly during the height of the pandemic as businesses struggled to cope with the stresses of keeping afloat during the crisis. Whilst the dust may have begun to settle now, as you look towards steadying the proverbial ship, it’s important to review existing HR practices, especially those surrounding employment terminations. In this week’s article, we’ll be looking at the dangers and pitfalls of dismissing employees based on the excuse of ‘poor cultural fit’, as well as tips on how to better navigate employee dismissals.

‘Poor Cultural Fit’

In the never-ending endeavour by Human Resources to navigate an increasingly diverse group of employees ethnically and effectively, there always remains the issue that comes at large with employees that just might not ‘fit’ with business practices and procedures, or ‘gel’ with the rest of the team as well as you hope they might. Equally challenging for HR is situations where employees just aren’t up to mark, with a significant incompatibility between them and their responsibilities at the cost of the efficiency of your business. Often in these circumstances, the ‘oldest excuse in the book’ to move on (terminate) that employee is the oft quoted ‘poor cultural fit’. Used in lieu of providing detailed or specific reasons, it’s a blanket statement that’s been a preferred method of choice when it comes to having to let an employee go, as it is often seen as the best way to gently communicate dismissal to a staff member. However, as the case of McEvoy v Acorn Stairlifts Pty Ltd [2017] NSWCATAD 273 (“McEvoy”) illuminates, this deceptively ‘easy and gentle’ route can be incredibly costly for businesses.

The McEvoy Case

In this 2017 case, a clumsy and poor attempt by a manager to performance manage an employee – citing the excuse of ‘cultural’ fit – resulted in the engagement in serious workplace misconduct (through the unacceptable conduct towards a staff member) and exposure of the business to significant risk. In McEvoy, Mr McEvoy (62 years old) was employed for just 16 weeks as a telephone sales advisor at Acorn Stairlifts Pty Ltd (“Acord”).  It was alleged that after the new manager (Ms Kelly) was appointed to manage the sales team, she held a meeting with Mr McEvoy and:

• Stated “I don’t care about the sales figures, and I haven’t even looked at your sales figures. It’s got nothing to do with your sales figures” and “you don’t fit the culture here, and I don’t believe that with your back and poor hearing you can continue working here” (emphasis added);
• Told him he was ‘too old’ for his role given that others in the workplace were aged between 25-30;
• Stated that she had concerns his back injury (sustained outside of work) might give rise to a workers compensation claim; and
• Emphasised that the problem was with Mr McEvoy’s hearing, not his performance.

Mr McEvoy made a complaint to the NSW Civil and Administrative Tribunal, alleging that the above conduct constituted ‘unlawful discrimination’ because of his age and disability. Acorn attempted to rely upon the classic ‘get out of jail free’ card of having terminated Mc McEvoy during his probationary period on the basis of “cultural fit”, not age per se. Unfortunately (for Acorn), Ms Kelly’s employment was terminated by the time the matter proceeded to a hearing and she refused to attend the hearing as a witness. The Tribunal sided with the ex-employee, ordering the employer to pay the ex-employee $31,420, sending a clear message that if employers want to let people go they must go about it the right way and not hiding behind ‘poor culture fit’ as an excuse.

Implications of McEvoy and considerations for your workplace

To prevent such costly lessons (and considerable risk and media exposure) like the above case, we recommend the following:

• training and educating managers and team leaders to prevent unlawful discrimination in the workplace;
• ensuring that management is aware of current laws regarding what can constitute an unfair dismissal, discrimination, and a breach of a general protections in the workplace;
• implementing procedures to manage underperformance – including having robust and ethical performance management systems;
• ensuring dismissal procedures are consistent and defensible, and tied to reasonable business grounds;
• ensuring that all reasonable steps are taken to prevent ‘rogue’ managers or reasons are given to an employee; and/or
• being specific with reasons for termination and communicating such specific instances or incidents to the employee.

Just remember – if Mr McEvoy had been dismissed for reasons including his hearing (his inability to hear callers, their names, requiring customers to shout or repeat their orders etc.) then such specific instances may actually have demonstrated he could not perform the ‘inherent requirements’ of his telephone-based job, and (assuming there were no reasonable adjustments that Acorn could have made to accommodate him) he could’ve been lawfully dismissed as a result. Need some help managing an employee who is a chronic underperformer and is not the suited candidate you had initially thought they were? Is their incompatibility with their role and responsibilities causing significant disrupt to the efficiency of your business? The obligations that rest on the shoulders of employers in relation to hiring and firing are extremely onerous. Do not make an uninformed decision and suffer the severe consequences like the employer did in McEvoy! Safeguard your organisation against the possibility a disgruntled ex-employee or job applicant might bring a discrimination or general protections claim against you – reach out to us for expert advice and assistance. Just call Workplace Wiizards on 03 9087 6949 (or email at support@workplacewizards.com.au), who can provide you with advice and further information on unfair dismissal laws and provide tips for how to ensure you make fair, reasonable and legally defensible termination decisions.