Performance Warnings and Written Notices: What Employers Must Document

By Natasha Silveira | 2 October 2026 | 11 min read

Your bookkeeper has missed three BAS deadlines in four months. You’ve mentioned it twice in passing, and nothing has changed. Now you’re wondering whether those chats count as warnings, and what a proper performance warning letter in Australia needs to say. The answer matters. If you ever dismiss her, the Fair Work Commission will ask whether she was clearly warned and given a fair chance to improve.

This guide explains the different types of warnings, what each one must contain and how to document the process so it holds up.

Why warnings matter in unfair dismissal claims

When the Fair Work Commission hears an unfair dismissal claim based on poor performance, the Fair Work Act tells it to consider whether the employee was warned about that performance before being dismissed. Its benchbook on warnings says a warning must identify the aspect of performance that concerns the employer and make it clear that the job is at risk unless things improve.

Claims are not rare. The Commission received 44,075 lodgements in 2024 to 2025, and unfair dismissal applications made up 37 per cent of them, according to HR Leader’s report on the Commission’s annual figures. Most small business owners will face at least one difficult exit over the life of the business.

A clear warning protects both sides. The employee knows exactly what has to change. You have a record showing you acted fairly. Without that record, it’s your word against theirs.

Expectations are often less clear than managers assume. Gallup’s research found that only 47 per cent of employees strongly agree they know what is expected of them at work. If the standard was never set, a warning about missing it is on shaky ground.

Verbal warnings, written warnings and show cause letters

Warnings come in three main forms. They aren’t legal categories, but they describe how most businesses step up the seriousness of a performance issue.

Verbal warning

A verbal warning is a formal conversation, not a passing comment. You tell the employee what the problem is, what standard you expect and what will happen if it doesn’t improve. It still needs a written record. Send a short email afterwards confirming what was discussed, or keep a signed file note.

Written warning

A written warning is a letter given after a meeting where the employee has had a chance to respond. The Fair Work Ombudsman’s guidance on managing performance says the warning should be given in writing, be clear about the reason, set out what needs to change and be fair in the circumstances. Many businesses give a first written warning and then a final written warning.

Show cause letter

A show cause letter is used when you are seriously considering dismissal. It sets out the concerns, the history of warnings and the action you’re considering, then invites the employee to explain why that action shouldn’t be taken. It is not a dismissal letter. You must genuinely consider the response before deciding anything.

What a performance warning letter in Australia must include

A warning letter doesn’t need legal language. It needs to be specific and fair. Include these elements in every written warning:

• The date, the employee’s name and their role.
• The specific performance concerns, with examples and dates.
• The standard you expect, in measurable terms.
• A summary of the employee’s response at the meeting.
• The support you’ll provide, such as training or weekly check-ins.
• The review period and the date of the next meeting.
• A clear statement that employment may end if there’s no improvement.
• Whether this is a first, second or final warning.

Ask the employee to sign a copy to confirm they’ve received it. Their signature doesn’t mean they agree, and the letter should say so. If they refuse to sign, note the date and time you handed it over, and who was present.

Keep the tone calm and factual. Avoid labels such as “lazy” or “careless”, and stick to what happened and what needs to change. A letter written in anger reads badly in front of a tribunal member.

Performance or conduct?

Check which problem you’re actually dealing with. Performance is about the ability to do the job to the required standard. Conduct is about behaviour, such as rudeness, lateness or breaking a policy. The process is similar, but conduct allegations that are disputed often need fact-finding first. Our guide on how to run a workplace investigation covers that step.

The opportunity to respond

This is where many warnings fall over. Before you issue a written warning, meet with the employee, explain the concerns and let them answer. They may have a reason you didn’t know about, such as unclear instructions, a workload spike, a health issue or a family situation.

Give notice of the meeting and tell them what it’s about. Offer them the chance to bring a support person, such as a colleague or friend. The Fair Work Act lists an unreasonable refusal to allow a support person as a factor when deciding whether a dismissal was unfair.

Listen properly and write down what they say. If their explanation changes the picture, adjust the warning or hold off. A warning written before the meeting has even started is a red flag. Commission members look for signs that the outcome was decided in advance.

If the employee raises a medical issue or caring responsibilities, pause and consider whether reasonable adjustments are needed. Pushing ahead regardless can create a discrimination or general protections risk on top of the performance issue.

How many warnings do you need?

There’s a common belief that you must give three warnings before dismissing someone. It isn’t true. The Fair Work Ombudsman says there’s no general rule requiring three warnings, or even one, before employment ends.

What matters is whether the process was fair overall. For a performance problem, that usually means the employee was told clearly what was wrong, warned that their job was at risk and given reasonable time and support to improve. One clear final warning with a fair review period can be enough. Three vague chats rarely are.

Small businesses with fewer than 15 employees can follow the Small Business Fair Dismissal Code. For dismissals that aren’t for serious misconduct, the Code expects you to warn the employee, verbally or preferably in writing, that they risk dismissal if there’s no improvement. You also need to give them a chance to respond and a reasonable chance to fix the problem.

Set a review period that suits the task. A receptionist answering calls late can improve in two weeks. A sales role tied to quarterly targets may need a full quarter. The Fair Work Ombudsman’s best practice guide on managing underperformance recommends confirming every performance discussion with an email or letter.

A sample warning letter structure

Use this structure as a starting point and adapt it to the role and the award or agreement that applies.

1. Heading: “First written warning” or “Final written warning”, with the date.
2. Background: The meeting date, who attended and any support person.
3. The concerns: Two to four specific examples with dates.
4. Your response: A fair summary of what the employee said.
5. The standard: What good performance looks like, in measurable terms.
6. Support offered: Training, resources or regular check-ins.
7. Review period: How long, and when you’ll meet next.
8. Consequence: Further action, up to dismissal, if there’s no improvement.
9. Acknowledgement: A signature line confirming receipt, not agreement.

Keep each letter to one or two pages. If it runs longer, you’re probably including history that belongs in a file note. Store the signed copy on the employee’s personnel file, along with meeting notes and any emails that followed.

What employers must document, and where to keep it

The letter is only one part of the record. If a claim arrives, the Commission will want to see the whole story, in order. Build the file as you go, not after the employee has left.

For each stage of a performance process, keep:

• The position description and any written targets or KPIs.
• Evidence of the problem, such as reports, emails or customer complaints.
• Meeting invitations showing notice and the offer of a support person.
• Notes of each meeting, including the employee’s response.
• Copies of every warning letter, signed or with proof of delivery.
• Records of training, coaching or other support provided.

Write notes on the day, while details are fresh. Date them and say who wrote them. Notes created weeks later look like they were built to justify a decision.

Keep the file secure and limit access to the people who need it. Performance records contain personal information, and a leaked warning can turn a manageable issue into a grievance. A single, well-organised file also makes life easier if a new manager takes over the process halfway through.

When warnings don’t work

Most warnings lead to improvement, especially when the employee gets real support. When they don’t, hold a final review meeting. Go through the results against the standard you set, and let the employee respond again.

If you’re now considering dismissal, send a show cause letter and give a reasonable time to reply, often a few business days. Consider the response with an open mind. Then decide. If you do end the employment, follow the steps in our guide on how to terminate an employee legally in Australia, including notice and final pay. Check the final pay figures with whoever handles your payroll services, so leave and notice are calculated correctly.

Not every case ends in dismissal. Sometimes a role change, reduced duties or a different team is the better outcome for both sides. Record why you chose that path.

Managers who’ve never run this process often find the first conversation the hardest. Our guide to HR support for managers handling their first performance issue walks through preparing for it.

VeiraMal’s outsourced HR services help SMEs in Melbourne, Sydney and Hobart draft warnings, run performance meetings and keep records that stand up. For a quick read on a situation you’re managing, call VeiraMal directly or send a message through the contact form.

Frequently asked questions