If you’re managing a team in Australia, there may come a time when you need to formally ask an employee to explain alleged conduct or performance concerns before you make any decisions.
That’s where a show cause letter comes in. It helps you follow a fair, lawful process, gather the right information and reduce the risk of an unfair dismissal claim or other dispute.
In this guide, we’ll break down what a show cause letter is, when to use one, what to include, and how to run a procedurally fair process under Australian employment law. We’ll also cover practical tips and common mistakes to avoid so you can handle these situations confidently and respectfully.
What Is a Show Cause Letter in Australia?
A show cause letter (sometimes called a Notice to Show Cause) is a formal written invitation for an employee to explain why a proposed action should not be taken.
Typically, you’d issue one after you’ve identified serious performance or conduct concerns and gathered preliminary information. The goal is to give the employee a real opportunity to respond before you decide on next steps, such as a warning, a performance improvement plan, or in serious cases, termination.
Legally and practically, a show cause process supports procedural fairness. It demonstrates you’ve:
- Set out the specific allegations and evidence
- Invited the employee to respond and provide their own evidence
- Genuinely considered that response before deciding on an outcome
This approach is consistent with Australian principles of natural justice and the unfair dismissal framework, including the kinds of factors the Fair Work Commission considers under section 387 of the Fair Work Act (for example, whether the employee was notified of the reasons and given a chance to respond).
For small businesses (fewer than 15 employees), the Small Business Fair Dismissal Code also sets expectations about warning and response opportunities for performance-related dismissals. While the Code is separate, running a clear show cause process helps demonstrate you’ve acted consistently with fair process.
When Should You Use One (and When Not To)?
Not every workplace issue requires a show cause letter. However, it’s commonly used where the proposed outcome could be significant and you want a clear, documented process.
Situations where a show cause letter is appropriate
- Serious misconduct: Allegations such as theft, fraud, harassment, serious safety breaches, or wilful refusal to follow lawful and reasonable directions.
- Ongoing underperformance: After you’ve set expectations and provided feedback/support, but performance hasn’t improved and a formal decision (e.g. final warning or termination) is being considered.
- Policy or contract breaches: Repeated lateness, misuse of confidential information, breach of IT or safety policies, or other clear violations of obligations.
- Probation concerns: If you’re considering ending employment during probation, a brief but fair opportunity to respond is still important (see our guide on termination during probation).
- First-time or minor issues: These are often better handled informally through coaching or an early-stage performance management discussion.
- Purely operational changes: For changes to duties or roster (that aren’t disciplinary), you’ll usually follow consultation or variation processes rather than a disciplinary show cause process.
- Redundancy: Redundancy is about the role no longer being required, not the person’s conduct. It involves consultation rather than allegations of wrongdoing.
In serious conduct cases, consider whether temporary measures are needed while you investigate and run your process - for example, suspending an employee pending investigation, or in limited circumstances, standing down an employee. The right option depends on your circumstances and any applicable award or enterprise agreement.
How To Draft a Compliant Show Cause Letter
Clarity and specificity are essential. The letter should make it easy for the employee to understand what’s alleged, review the evidence and prepare a meaningful response.
1) Identify the purpose and proposed outcome
Open by explaining you’re asking the employee to show cause why a proposed action should not be taken. If you’re considering multiple possible outcomes (e.g. formal warning, final warning, termination), list them so the employee understands the stakes.
2) Set out precise allegations and evidence
Describe the factual allegations clearly and neutrally. Include dates, times, locations, and who was involved where relevant. Refer to documents (e.g. emails, CCTV, reports) and attach copies if appropriate.
If the concern is performance-based, point to measurable expectations, past feedback, and the gap between expectations and actual performance. Reference the relevant Employment Contract and any Workplace Policy obligations so the context is clear.
3) Explain the process and invite a response
Tell the employee how they can respond (in writing, at a meeting, or both), when you need their response, and where to send it. Avoid a one-size-fits-all deadline. Instead, set a timeframe that’s reasonable in the circumstances - consider the number and complexity of allegations, whether the employee is at work or suspended, and their need to gather documents or seek support.
It’s also good practice to confirm they may have a support person at any meeting, as this is one of the fairness factors considered under section 387.
4) Outline next steps and potential consequences
Explain what will happen after you receive the response (e.g. you’ll consider it and then communicate a decision in writing). Be upfront about potential consequences if the allegations are substantiated, which may include a warning, a performance improvement plan, or termination with notice or payment in lieu of notice (subject to the outcome and applicable law).
5) Keep the tone professional and neutral
The letter should not assume guilt or use emotive language. Your role is to outline concerns and invite a fair response. Keep it factual, respectful and consistent with your policies.
6) Attach relevant documents and confirm confidentiality
Attach any documents you’re relying on. If you’re not sharing specific material (for example, to protect a complainant in a sensitive matter), take care to balance confidentiality with the employee’s ability to respond. Confirm that the process is confidential and request the employee to maintain confidentiality too, unless they are seeking support or advice.
Running a Fair Process: Meetings, Timelines and Next Steps
A strong letter is only half the picture - the overall process must also be fair. Here’s what that looks like in practice.
Invite a meeting (where appropriate)
Offer the employee a meeting to discuss the allegations and their written response. Remind them they may bring a support person. If they can’t attend your suggested time, offer reasonable alternatives.
Be flexible on timing where reasonable
There’s no fixed legal timeframe that applies in every situation. What’s “reasonable” will depend on factors like complexity, availability of information and the employee’s circumstances (e.g. illness, caring responsibilities, leave). If a short extension allows a meaningful response, granting one can support fairness and good decision-making.
Consider the response with an open mind
Genuinely assess the employee’s explanation and evidence. If new issues arise that you intend to rely on, give the employee a chance to comment on those too. Avoid a preset decision.
Decide and communicate the outcome
Once you’ve considered everything, make a decision and confirm it in writing. Explain your reasons, the evidence relied on, and any right of review or appeal if provided for in your policies or an enterprise agreement. If you’re ending employment, confirm the notice arrangements or any entitlement to payment in lieu, and return of company property.
Document the process
Keep a clear paper trail - the letter, attachments, meeting notes, the employee’s response, your assessment, and the final outcome letter. If your matter ever ends up before the Commission, strong records can make a real difference.
If you’re dealing with performance concerns (rather than single-incident misconduct), consider whether a structured plan is more appropriate than immediate disciplinary action. A well-run performance management process can set expectations, provide support and reduce risk.
How Should An Employee Respond?
Even though this guide is written for employers, it helps to know what a constructive response looks like. This can support a fair process and better decisions.
- Read the letter carefully: Identify each allegation, the evidence attached and the deadline.
- Gather relevant documents: Emails, rosters, witness statements, policy extracts - anything that supports their version of events.
- Address each allegation directly: Facts first, then context. If there are errors in the evidence, explain them and provide your own material where possible.
- Ask for a meeting or an extension if needed: If more time will lead to a better, fairer response, request it promptly.
- Identify any mitigating factors: Training gaps, workload issues, unclear instructions or support needed can all be relevant.
Encouraging a structured, specific response helps you make a balanced decision - and often resolves matters earlier and more constructively.
Common Pitfalls To Avoid
Most disputes arise from process missteps rather than the underlying issue. Here are frequent pitfalls and how to steer clear of them.
- Vague allegations: General statements like “poor attitude” or “unprofessional behaviour” are too broad. Be specific about conduct, dates, locations and impact.
- Unreasonable timeframes: Avoid arbitrary deadlines. Set a timeframe that’s reasonable for the complexity of the matter and grant sensible extensions where appropriate.
- Predetermination: Don’t write or act as though the decision is already made. Keep language neutral and genuinely consider the response.
- Skipping steps for small businesses: Even under the Small Business Fair Dismissal Code, it’s important to notify the employee of the concern and provide an opportunity to respond before dismissal for performance reasons.
- Failing to consider support person requests: While you don’t have to allow active advocacy, an employee should be allowed a support person at meetings if they request one - this is one of the fairness factors under section 387.
- Not aligning with policies or awards: Some awards or enterprise agreements set out extra steps. Follow your own policies consistently and check any industrial instrument that applies.
- Unclear outcome letters: If you decide on action, confirm your reasons and the evidence relied on. Where termination is the outcome, ensure your letters align with notice obligations and any payment in lieu of notice you’re making.
If you need templates and structure for this process, tools like an Employee Termination Documents Suite can help ensure your letters cover the right ground, in the right order.
Key Takeaways
- A show cause letter is a formal invitation for an employee to explain alleged conduct or performance concerns before you decide on disciplinary action.
- A fair process means clear allegations, access to relevant evidence, a genuine opportunity to respond, and an unbiased decision - the same themes considered under section 387 of the Fair Work Act.
- There’s no fixed “standard” deadline - set a timeframe that’s reasonable for the situation, and be open to sensible extensions that support a meaningful response.
- Use a neutral tone, align with your Workplace Policy and Employment Contract, and keep strong records of every step.
- Where appropriate, consider interim steps such as suspending an employee pending investigation or a structured performance management process for capability issues.
- If termination is the outcome, confirm your reasons, notice or payment in lieu of notice arrangements, and any return-of-property steps in a clear outcome letter.
If you would like a consultation on show cause letters, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
