Watch the wording when creating performance policies

EMPLOYMENT LAW

Diligent employers who create and circulate “policies and guidelines” for employees are to be applauded for good human resources management but cautioned about what they include in those policies.

When Jasper signed his hiring letter for a management position, he was also given a copy of his new employer’s policies and guidelines and asked to sign them at that time.

The hiring letter indicated there would be a three-month probationary period during which he could be terminated without notice.

Being the progressive employer that it was, its policies and guidelines had a “Coaching for Improved Performance” section which set out a three-step process for dealing with performance issues which included Step 1: a verbal warning, Step 2: a written warning and Step 3: a final written warning before termination would occur.

After two and a half months, Jasper was terminated without explanation and without any pay in lieu of notice.

When he sued for wrongful dismissal, the evidence at trial was that the employer had spoken to him with respect to both his strengths and weaknesses but had seen no improvement and made the decision that the relationship was not going to work in the long term. No written warnings were provided.

The court decided that even though there was a probationary clause, the employer had to live by the policies and guidelines to which it and Jasper had agreed.

By not providing Jasper with the Step 2 written warning and the Step 3 final written warning, it had breached the very terms it had created. As a result of this breach of contract, the probationary clause did not protect the employer and they were ordered to pay three months’ pay in lieu of notice and legal costs.

I routinely discourage employers from adopting detailed progressive discipline policies or putting a caveat on them. Including these words would have changed everything for Jasper’s employer:

The following progressive discipline policy does not apply when an employee is still in their probationary period and after that, management reserves the right, in its complete discretion, to waive any or all of the progressive discipline steps.

I then tell them to change any words like “will” to “endeavour to” or similar language.

Readers might be thinking that these changes rob a progressive discipline policy of any real meaning and you would be largely correct.

The fact is, there will be circumstances where an employee does something or behaves in a certain way that would not be a firing offence but the employer makes a gut call that things are simply not going to get better. For instance, what is the point of a progressive discipline policy for an employee who will not even acknowledge the behaviour in question is a problem?

If Jasper’s employer was ever unionized, none of this would matter as progressive discipline would become mandatory in all but the most heinous situations. That can be a very good thing for workers. It protects them from fickle managers.

But unless and until an employer does become unionized, it is probably not good business sense to unnecessarily bind their own hands.

That is not to say that employers should not make every attempt to follow a progressive discipline policy. The policy can salvage working relationships and, if it is fairly and consistently followed, perhaps help avoid a successful unionization drive.

Ed Canning practises labour and employment law with Ross & McBride LLP, in Hamilton, representing both employers and employees. You can email him at ecanning@rossmcbride.com.