Managing Misconduct

How to address behaviour issues without escalating risk, breaching procedure, or damaging culture.

Every workplace experiences moments where behaviour crosses a line. It might be a team member speaking aggressively to a colleague, repeatedly ignoring a supervisor’s instructions, breaching safety rules, or behaving in a way that simply doesn’t reflect the standards you expect.

When this happens, most leaders feel the same pressure: How serious is this? What should I do next? Am I allowed to act quickly? What if I get the process wrong?

Misconduct isn’t just a people issue: it’s cultural, operational, and a compliance responsibility. The way you respond sets the tone for how your team understands expectations, consequences, and fairness.

The good news? Managing misconduct doesn’t need to be complicated. With a clear, consistent framework, leaders can address behaviour early, fairly, and confidently.

Why leaders find misconduct challenging

Most leaders are promoted for technical capability, not their skill in handling behavioural issues. That means they’re often left second-guessing themselves in situations that carry legal, relational, and cultural consequences.

This uncertainty often leads to one of two extremes:

Overreaction:
Jumping straight to discipline or termination without giving the employee a chance to respond. Example: A supervisor fires a casual for “talking back” without documenting anything or giving them an opportunity to explain. The employee later claims unfair dismissal.

Underreaction:
Letting behaviour continue because it feels “too hard” to address. Example: A high performer consistently undermines colleagues in meetings. Everyone sees it, but because they “get results”, no one steps in. Morale slowly drops and turnover spikes.

Both approaches create risk and damage culture. Leaders need a middle path. Early action, done fairly.

The quiet cost of leaving misconduct unaddressed

Behaviour rarely exists in a vacuum. Even small issues can shift team dynamics.

Example: A worker frequently arrives 5-10 minutes late. No one addresses it. Within weeks, three others start doing the same. Before long, resentment builds between those following the rules and those who aren’t.

Misconduct left unchecked can lead to:

  • breakdowns in trust
  • confusion about expectations
  • inconsistent standards
  • safety risks
  • higher turnover
  • increased complaints
  • psychological injury claims

Today, with stronger positive duty obligations and tighter expectations around respectful workplaces, ignoring behaviour isn’t only a cultural issue, it’s a compliance breach.

Misconduct vs poor performance knowing the difference matters

Leaders often blur these two issues, which leads to the wrong response.

Poor performance is about capability or output.
Misconduct is about behaviour, attitude, or rule-breaking.

Getting this wrong creates unnecessary conflict.

Example: A warehouse employee keeps making picking errors. A manager treats it as misconduct (“you’re careless and not listening”), when it’s actually a training gap. The relationship deteriorates and the employee shuts down.

Opposite scenario:
A team member behaves rudely to customers but delivers high sales numbers. Their manager frames it as a “coaching opportunity” instead of misconduct. Other employees see the double standard and morale drops.

A correct diagnosis is the foundation of a fair process.

A best-practice approach to handling misconduct

Below is a simple, practical framework you can use across most industries.

1. Pause and assess

Before reacting, take a moment to clarify what actually happened.

Ask yourself:

  • What did I observe or what was reported?
  • Does this breach a policy, safety rule, or behaviour expectation?
  • Is this a one-off or a pattern?
  • Does this put anyone at risk?

Example: A team leader overhears an employee swearing loudly on the phone to a supplier. They pause and consider: Is this frustration? Is there provocation? Is this part of a pattern? Has the employee been spoken to about professionalism before?

This first step stops knee-jerk decisions and keeps the process fair.

2. Act early, but never rushed

You don’t need to turn every issue into a formal investigation. But waiting too long allows behaviour to become entrenched and signals that standards aren’t meaningful.

Example: Two employees have a heated exchange on the floor. Instead of avoiding the conversation until “things cool down”, the supervisor speaks to both privately that same day to understand what happened, confirm expectations, and determine whether a formal step is needed.*

Early action doesn’t mean rushing, it means not avoiding.

3. Follow a fair process

A fair process protects the business and the employee. At minimum, it includes:

  • written notice of the concern
  • explanation of the specific behaviour
  • time for the employee to prepare
  • the right to a support person
  • a genuine opportunity to respond
  • unbiased decision-making

Example: A manager receives a complaint that an employee made inappropriate comments. Instead of confronting them on the spot, they send a clear, factual letter outlining the concern, invite the employee to a meeting with a support person, and avoid drawing conclusions until hearing their response.*

This is where many businesses fall down. Not because they acted, but because they acted too quickly without all the facts or a plan.

4. Keep documentation tight

Notes don’t need to be perfect, just clear.

Record:

  • what happened
  • what was discussed
  • the employee’s explanation
  • the outcome
  • next steps

These should ideally be in a format or method that allows future references to be clean (e.g ensure they are date/timestamped and saved in a format that cannot be edited noting that they were a true and complete record at the time of the event).

5. Set clear expectations moving forward

Misconduct management isn’t just about addressing the incident, it’s about preventing recurrence.

Make expectations explicit and practical:

  • “We need you to follow instruction the first time.”
  • “Professional language is required when interacting with clients.”
  • “Any future breach may lead to formal disciplinary action.”

Example: After confirming a safety breach was unintentional, the supervisor reminds the employee of the correct procedure, arranges a short refresher, and documents the discussion. The employee understands the seriousness without feeling punished.*

Clarity is what changes behaviour.

The link between misconduct and culture

Culture isn’t built by your policies, it’s built by what you enforce and what you ignore.

Example: Your policy says bullying isn’t tolerated. But a long-serving employee regularly belittles juniors and no one says anything because they’re “business critical”. You now have a cultural problem, not a people problem.

Addressing behaviour well reinforces trust, fairness, and psychological safety. Avoiding it does the opposite.

When escalation is necessary

Some situations require immediate escalation, including:

  • safety breaches
  • harassment or discrimination
  • threats or aggression
  • dishonesty or fraud
  • serious policy breaches

These aren’t coaching moments, they’re compliance issues.

Example: An employee threatens a co-worker during an argument. The business places them on paid suspension the same day, conducts a formal investigation, and ensures all parties feel safe while the facts are reviewed.

Leaders shouldn’t navigate these alone. Expert support makes all the difference.

The bottom line for leaders

Managing misconduct is not about punishment. It’s about maintaining a safe, respectful, and consistent workplace and protecting your team from the impact of someone else’s poor behaviour.

Done well, it:

  • strengthens trust
  • reinforces standards
  • reduces risk
  • improves culture
  • boosts retention
  • supports accountability

At Jessie Grace, we help leaders handle misconduct with confidence, fairness, and clarity ensuring issues are addressed early, consistently, and in a way that strengthens culture, not fractures it.

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Yes, but only if you’ve followed a fair process. This means setting clear expectations, giving feedback, providing a genuine opportunity to improve, and documenting every step. Terminations that skip this process often get overturned at the Fair Work Commission.

Start by identifying whether the absences are authorised (such as sick leave) or unauthorised. If absences are excessive or patterns emerge, meet with the employee, document the discussion, and explore underlying causes. If the issue persists, you may escalate to formal warnings or a performance management process.

Poor performance relates to not meeting role expectations (e.g. quality or output), while misconduct involves breaches of behaviour or conduct standards (e.g. theft, harassment, safety breaches). The processes differ: misconduct often triggers disciplinary action, while poor performance requires a performance improvement process.

Not legally in every case, but warnings are a key part of showing procedural fairness. For performance issues, written warnings are best practice. For serious misconduct (e.g. theft, assault), you may move to termination without prior warnings — but only after a fair investigation.

Failure to follow lawful and reasonable directions may amount to misconduct. Employers should meet with the employee, clarify expectations, and document the refusal. If it continues, disciplinary action (including termination) may be justified, but ensure you follow due process.

Rushing to termination without a fair process exposes you to unfair dismissal, general protections, or discrimination claims. Even if the substantive reason is valid, skipping procedural fairness can make the dismissal unlawful. The result being a claim that could cost up to 6 months of the employees wages (more if the dismissal deemed to be discriminatory). Taking the time to follow process protects both the business and its culture.

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