Key for discipline and dismissal, but policies must be followed closely
It can be difficult for employers to address employee performance and discipline issues, so employers may consider implementing a progressive discipline policy in the workplace to address issues with employee performance when they arise. Such a policy may involve various steps the employer can take to work with employees and improve their performance. Also, setting out a clear progressive discipline policy can help set expectations and would be valuable evidence if the decision is made to terminate the employee for cause. However, employers with a progressive discipline policy must be prepared to implement the policy where applicable. Otherwise, courts may have difficulty finding that the employee was validly terminated for cause.
In this column, we will discuss what you should know about progressive discipline policies in the workplace. We will discuss the benefits of having a progressive discipline policy and the consequences if an employer does not follow the progressive discipline policy they have set out before terminating an employee for cause. We will also examine the case, Waddilove v. 1748960 Ontario Ltd., 2018 ONSC 448, which discusses the consequences if an employer does not follow their progressive discipline policy before terminating an employee for cause. Employers and employees seeking to understand the role and consequences of progressive discipline policies will benefit from this post.
A progressive discipline policy outlines a series of procedures that an employer must take if there are issues concerning the employee’s work performance. These steps are meant to help improve the employee’s performance. Typically, the steps in a progressive discipline policy increase in severity as more disciplinary measures are needed. For instance, the policy may begin with verbal or written warnings and then move on to developing a plan for the employee to improve their performance. The plan may involve monitoring and setting specific goals for the employee to reach in a specified time period. In addition, the progressive discipline policy may include other training to help put the employee back on track. Finally, if the prior measures were unsuccessful, the policy may include terms for suspending the employee if their performance improves or worsens.
Progressive discipline policies can vary depending on the industry and the employer, but they generally follow the sequence set out above.
Benefits of a progressive discipline policy
Progressive discipline policies have various benefits. They can help manage an employee’s performance gradually so as not to increase any further animosity in the employment relationship. As progressive discipline policies also involve monitoring the employee’s performance, they can provide some measures of how the employee is improving or not. Also, having a progressive discipline policy can set clear expectations for both the employer and employee from the outset. A progressive discipline policy can also provide opportunities for an employee to be notified of any issues with their performance so that they can address the concerns.
If an employer ultimately decides to terminate an employee for cause, this can often be difficult to prove. Therefore, it is important to have a progressive discipline policy set out and for employers to follow it so there is a record of the employee’s performance, which may justify a termination for cause. If an employee is not notified of issues concerning their work performance, a court may be more unlikely to find that there was termination for cause.
What if an employer doesn’t follow their progressive discipline policy?
While having a progressive discipline policy has various benefits, it can also be problematic if an employer does not follow the policy they have set out. If there is a progressive discipline policy in place, but the employer does not implement it or implements it unfairly, a court may find that the employer did not provide opportunities for the employee to address their work performance issues. As a result, the court may find that the employer did not validly terminate the employee for cause, and the employer may be liable to pay additional damages to the employee, such as pay in lieu of reasonable notice.
The Waddilove case illustrates the consequences for an employer who fails to follow its progressive discipline policy. In this case, the employee worked with the employer for seven years as a general manager for a bingo hall. The employee had a long history with the employer in various roles. He was terminated for cause seven months after opening in 2008, as he was found asleep at his desk, which was captured on video.
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The following year, the employee was re-hired as the operational manager but was later demoted to a lower role with reduced pay. By 2010, the employee was suspended without pay and filed a grievance with the Ontario Labour Relations Board. In 2011, the employee was offered to be the general manager, which he accepted. As a result, the employee withdrew his grievance with the Labour Board.
During his tenure as general manager, the employer had multiple concerns about the employee, including:
- Complaints from customers about the employee’s behaviour
- Absenteeism
- Running up his cell phone bill
- Failing to provide the company’s bookkeeper with information concerning invoices, sales figures, and payroll
- Insisting on driving to the bank each night to make cash deposits rather than using the systems in place
- A nightly deposit was found in the employee’s desk rather than in the safe, which was against company policy
- Failing to pay supplier invoices in a timely manner, resulting in late payment fees.
The employer had a progressive discipline policy with five steps:
- Informal coaching
- Verbal warning
- Written warning
- Final written warning with possible suspension
- Termination.
The employer also had specific forms to document and record the steps taken through the progressive discipline policy. In the forms, the employer would need to describe the performance issues, confirm the recommendations made to correct performance issues and have the employee acknowledge the issues and recommendations. The policy allowed the employer to move forward with a termination if necessary rather than implementing the prior steps.
In this case, the court found that the employer did not follow the policy. The employer did not give any warnings in accordance with the policy. Some letters were issued to the employee concerning the issues regarding the bank deposit in his desk and requesting that he provide the necessary information to the bookkeeper. Still, the court found that the employee was not provided opportunities to correct his performance issues after being notified, so he could assume that there were no further issues with his performance. In some situations, the employee was not notified of his performance issues.
Therefore, the court found that the employee was not terminated for cause, and the employer was required to pay him in lieu of reasonable notice for his termination.
Takeaways for employers
While progressive discipline policies can be helpful in setting clear expectations in the employment relationship, the employer needs to ensure that they are following the policy. Otherwise, a court may find that the employee was not properly notified or given opportunities to correct issues with their work performance, so they were not validly terminated for cause.
Paulette Haynes is the founder of Haynes Law Firm, a boutique employment law firm in Toronto.
