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We're new business owners in Australia.

We were only a couple of weeks in to our business when we moved a confident employee who really wanted to work for us (with a customer-facing role) from casual to full-time. We provided him with contracts to take away and sign.

We have a clause in our contract that says:

Warranties as to Your Fitness and Obligations to Others

You represent to us that: there are no limitations on your ability to fully perform all of your duties and responsibilities for the Employer, including physical or psychological limitations or limitations arising from any prior employment;

He kind of jumped us with the disclosure that btw he had anxiety and depression and was receiving treatment for it. We kind of panicked and just accepted the signed contract back. He obviously didn't want to make a big deal about it and neither did we.

Fast-forward a year and he is not coping. He's really negative and manic and that's when he's having a good day.

His performance degraded gradually and we've progressively just taken duties away from him and now he's got virtually no responsibilities, just using up hours that could be going to decent employees. Frankly we can't afford to employee him anymore.

We have the dilemma though that when we approach him about his performance problems he cries "mental health" and says that we're bullying or being prejudice. We're the wettest, softest, smallest owners you've ever met and if anything it feels like he's bullying us.

Basically performance review is so hard but we're desperate to get rid of this guy because he's really damaging our business. He's stated clearly he will take us to fairwork if he gets fired.

Does anyone know what we can do?

NB He also wants a pay rise.

closed as off-topic by Philip Kendall, gnat, Michael Grubey, scaaahu, Draken May 15 '17 at 9:52

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  • Hmm, when you put in that clause about fitness for the job, what purpose did you have in mind? – Masked Man May 14 '17 at 5:24
  • @Masked Man the lawyers put it in – Robert Smith-Williams May 14 '17 at 5:27
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    What you can do: talk to your lawyers again. This is the sort of situation you pay them for. – Philip Kendall May 14 '17 at 5:59
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    So, he wants a pay rise. You do not have to give it to him, which might actually make him to want to leave. I usually don't like this kind of games, but he is already gaming you with (ab)using his mental problems to make himself "unexpendable". – skymningen May 14 '17 at 7:00
  • Did he show you any proof of his being under treatment when he disclosed the problem? – DS R May 14 '17 at 11:04
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First of all:

get help from a lawyer

I can't give you advice which is legally binding.

Keep in mind that you don't want to get rid of him because of his health but because he underperforms and all discussions didn't improved the situation.

You already mentioned that its hard to discuss the issue with him.

Give him a written warning that his performance is not satisfying anymore and that you tried to discuss it several times with him. Ask him to take responsibility for some projects or approach you on how he thinks the situation could improve. Don't mention his health at all. Set a time limit.

Not only will this made clear your point - maybe he just doesn't understands the gravity of the situation. It will also give him a chance to improve.

If all hell breaks loose you'll need help from a lawyer anyways. That you knew about his conditions years before will help you (it's not like "uh, he's sick, fire him". His performance went down over years).

Appendix:

If he interrupts you or seems rude feel free to say somthing like this:

XX, this isn't about your health. It's about your performance. We hired you knowing about your health and your work was fine in the beginning. We can't accept the situation like it is right now and try to find a solution with you. If there's something we can do to help you getting productive again, like reducing your FTE (OP, from your post he seems to be a waste anyway, reducing his time and payment wont hurt) or a few days off let us know.

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    I agree about focusing on performance not his condition. But make sure you take specialist advice before issuing a written warning. I don't know about the law in Australia, but in the UK, there's an escalating performance management/disciplinary procedure, which starts with a verbal (not written) warning. Employees here also have the right to be accompanied by a union rep (even if your business isn't unionised) or colleague at disciplinary meetings. Don't wing it – it'll cost you a lot more in the end. – Rob Ashton May 14 '17 at 16:37
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Sounds to me like you need an HR adviser on the team. They don't need to be employed – there are plenty of freelancers out there who will work on a retained or an hourly basis. You can usually find one at short notice, so it needn't matter that you don't have one already. (Get a recommendation from your network if possible.)

They really can be worth their weight in gold in situations such as this, which require specialist knowledge of employment law and procedures. A good one will also be able to take a pragmatic approach (which usually works out cheaper than using lawyers) and attend meetings with the employee in question.

If your business is growing, this won't be the last time you need specialist HR help. Trying to muddle along without it is a false economy.

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He kind of jumped us with the disclosure that btw he had anxiety and depression and was receiving treatment for it. We kind of panicked and just accepted the signed contract back. He obviously didn't want to make a big deal about it and neither did we.

I'm not sure I understand what "panicked" means in this context. But that was your clue that your new employee had issues worthy of disclosing.

It might have made sense at that time to discuss the clause and the employee's subsequent disclosure with your lawyer. There was a reason your lawyer put that clause into your employment contract - if you didn't understand what it means and what you should do about it, you must clarify that with your lawyer now.

Your lawyer might have advised you to only hire this person on a conditional/probational basis until you were more confident that the disclosed issues wouldn't interfere with work.

But that's in the past now.

We have the dilemma though that when we approach him about his performance problems he cries "mental health" and says that we're bullying or being prejudice. We're the wettest, softest, smallest owners you've ever met and if anything it feels like he's bullying us.

Basically performance review is so hard but we're desperate to get rid of this guy because he's really damaging our business. He's stated clearly he will take us to fairwork if he gets fired.

Does anyone know what we can do?

Read through https://www.fairwork.gov.au first. It has advice for employers as well as employees. Then consult with your attorney.

I suspect you will be advised to give a real performance review with real documentation, without regard to the mental health issues, and then just deal with it from there. Performance is performance and you shouldn't be grading on a curve here.

You likely also do not need to give an underperforming employee a raise - no matter what personal conditions are behind that underperformance. Ask your attorney.

Getting rid of this employee may be drawn out and problematic, but there is always a way to do so and still stay on the right side of the law. If your attorney isn't capable of advising you here due to a lack of familiarity with The Fair Work System rules, get your attorney's recommendation for an HR professional or other attorney who can. Then follow the advice carefully.

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