Performance Improvement Plans and Employees’ Rights [video]

Share this:

What is the impact of a performance improvement plan on an employee’s termination and severance rights? When faced with a performance improvement plan, what steps you must take to preserve your termination rights?

This lecture is taught by Amer Mushtaq, LL.B., M. Engineering , B.Sc. (Hons.), who is the Principal and Founder of Formative LLP.   Through his YouTube channel, YouCounsel, Amer shares practical advice from his years of legal experience to help anyone access justice and achieve their goals.  Subscribe today to learn more.

Show Notes:

N/A

Lecture Slides:

Coming soon …

Have a question about this video?

The team at Formative LLP has created a free discussion forum where anyone can post a legal question and get feedback from the wider audience of self represented litigants.  Join the discussion today!

Machine Transcription:

Welcome everyone, this is Amer Mushtaq from You Counsel.

Today, we will talk about performance improvement plans and what are employees’ rights when they are issued with the performance improvement plan. This question was asked of me a few times in the last month or so, and I thought it will be a good topic to cover in these lectures.

We’ll begin with our usual disclaimer that this course is not legal advice, so, if you have any specific questions you must contact an employment lawyer.

Performance improvement plan, what is it? You may have seen it in your work place, you may not have, but a performance improvement plan usually has a few components. It is a plan that is put in place when an employee is not meeting the expectations of his or her job, or duties, or targets... and the components that are usually part of the performance improvement plan is, first of all, the areas in which the employee must improve his or her performance. That’s clearly identified.

Secondly, there is a time frame that is established, usually 3 months, sometimes four or five months. During which time, the employee is given the opportunity to improve performance and meet the expectations that are required. There is usually some ongoing supervision or monitoring... often times, there is a bi-weekly meeting session, one to one meeting session, with the supervisor where the supervisor will go over the performance of the previous two weeks, provide his or her input, and suggest some of the ways in which the employee can further improve performance... and also, the performance improvement plan usually has some sort of support mechanism. If there is need for an employee to get additional training, that may be part and parcel of it... if the employee needs one to one coaching on certain aspects of his or her work, then that may be in place. So, these are not, sort of, legal requirements of a performance improvement plan... there is no such thing... but these are, sort of, the general components of a reasonable performance improvement plan that may be put in place.


Let me give you an example of how these performance improvement plans, are sort of brought in, the most common example that comes to my mind is with financial institutions or large banks. If you are an employee whose target is to, let’s say, to sell 20 credit card applications in a week and you are not meeting that target you may be called into a meeting and then put on a performance improvement plan where the employer and the supervisor will sit down with you and discuss why you are not meeting that target, what is the expectation, and what are some of the ways in which your performance could be improved. And the performance improvement plan may also indicate in that plan, that if you are unable to meet those targets, meet the expectations, in the timeframe of the performance improvement plan then what is the possible outcome... whether your employment can be terminated or not. So, that’s one example, there could be other areas of work where you are employed and you get a performance improvement plan and you have to deal with it.

I want to briefly tell you about the difference between a probationary period and a performance improvement plan. Usually they are two, sort of, separate entities. So, we want to talk about it. Probation, as you may know is usually set at the outset of the employment. So, once you’re hired, your employment contract may say that the first three months or six months of your employment may be considered a probationary period during which the employer may consider whether you are the right fit for the job that you’ve been hired... whether you have the skills and abilities that you said in your resume and interview that you have, to accomplish the work that is being passed and so, the employer has the right to assess that during the probationary period... and usually, it’s the employer’s discretion at the end to decide whether you should get continued employment or not. So, probationary period usually does not have a detailed plan. It is as simple as that. There is a time frame set and then the statement is that you will be assessed during that time whether you are able to perform your job or not.

So, I say probationary period is set usually at the outset of employment, but I’ve seen examples where during the employment the employer may put you on a probationary period and that often happens when there is a change in your role. So, let’s say if you’re working in payroll department and now you’re going to accounts receivable department and your job function has changed significantly and the employer, or you get a promotion... and so the employer may put you on a probationary period during employment, basically to assess whether you are capable of performing the new role... but it is not common that once you have passed your initial probationary period at the time of hiring and you have been working, you know, for a few years or for a few months in excess of your probationary period... that you are put on probationary period again, that’s that’s very uncommon, but it can be done. There is no law that prevents the employer from doing it.

So, that’s sort of the probationary period and then performance improvement plan, as I mentioned earlier, is usually provided during the course of employment... it’s supposed to be, generally, a very detailed plan because the idea is this is a plan that is being laid out to support the employee a) forewarn the employee that the performance is not being matched and b) lay out a plan where the employee gets some support in order to get to where the targets are.

I have seen cases in which an employee has been employed for twenty years. Same job, same function, and then all of a sudden, the employee has been put on a performance improvement plan…. usually, you know, very uncommon but it has been done... I have seen it happening and for a variety of reasons, some genuine, some disingenuous. So, you have to be careful about the performance improvement plan when you have been performing your duties appropriately... there hasn’t been any change in your performance and all of a sudden, either because of the restructuring in your workplace or because of the change in command... you get a new supervisor, a new manager, all of a sudden, targets have shifted and you end up getting on a performance improvement plan. So, you have to be watchful of the performance improvement plan.

So, what are some of the consequences? If you are put in a performance improvement plan, what happens, obviously, step number one, is that you end up meeting those performance targets and the paper has concluded so everything is good. Number two, there is no improvement and the employer believes that there may be some opportunity for you to benefit from an extended P.I.P. that may help you to get to the targets that are required and so you may get an extension in your P.I.P for another 3 months or so. Let’s say, there’s no improvement, the employer may decide to terminate you on a without cause basis... as you know, from previous lectures, on a without a cause basis, means that the employer can terminate you but will have to provide you with your termination, severance Rights, or common law termination rights if they’re applicable to you as an employee. And number four is that, if there’s no improvement, the employer may terminate you on a with cause basis. Meaning you will not got any rights on termination and severance. This fourth aspect is the one that worries me most... if you are an employee, because in this situation you end up losing all of your termination rights. So you want to be careful that you don’t want to end up- even if you’re on a performance improvement plan- you don’t want to end up in the fourth scenario here where your dismissal could be with cause.

Now, I just want to clarify that, in most circumstances, where performance is an issue... the termination with cause is not an appropriate remedy. And if an employer chooses to terminate you with cause, that may not be upheld by the court and that’s in the majority of the cases... but review of whether the employer has the right to terminate you on with cause or without cost basis is a very fact-specific review. It will vary from your circumstances, to another person circumstances... so, there’s no sort of general law here that says that if your performance is an issue you cannot be terminated with cause... that’s not what the law is... so, it is really based upon the specific circumstances of your case, but I want you to keep in mind is that in the majority of the cases and in a large majority of cases... performance is really not the grounds for an employer to terminate you with cause.

It usually falls in without cause category and one of the reason why that happens is because the general expectation is that when an employer is performing it’s due diligence in hiring an employee... they have the opportunity to look at your resume, they have the opportunity to interview you, call your previous references... so, there is an opportunity for an employer to assess before hiring you whether you will be a suitable match or not and whether you’ll be able to perform your duties... and later on, if it turns out that you are not the right person, then the law generally expects the employer to terminate you without cause because you took that position in good faith, in hopes that you will be able to perform and the employer hired you in good faith, so that you will be able to perform. So, it’s not a situation where you were negligent or you acted in a way that was contrary to the job that was provided to you... you just couldn’t perform it and so, then the option really is without cause termination. But in some situations, termination with cause, can be established or at least claimed by the employer... and I have seen circumstances as I mention. I’ve had cases in which it was a long term employee who had performed fine, for a course of a decade or even longer and all of a sudden, he was put on a performance improvement plan because the employer had now put in unrealistic targets which could not have been met by the employee and so, the employer was trying to use that as grounds for dismissal for cause... and so we had challenge that and fight that.

So, in the next slide, what I’m going to tell you is what are the steps that you will take to avoid this fourth scenario, so that you’re not getting caught in this situation where the employer may claim dismissal with cause. So, what do you do? First step is if you believe that the performance improvement plan is unfair... whether it’s unfair because your performance had no issues and you believe there is no issues and it is unfair for the employer to say that you have deficiencies in your performance... then you must send in writing... so verbal dissent is not sufficient. You must send an email to HR or to your boss saying that you do not agree with performance improvement plan... it’s unfair... or the performance improvement plan may be unfair because of the targets that it’s putting in place. Those may be unrealistic and cannot not be done.

Common joke that goes around is that you should never meet your targets because if you do meet your targets, the targets are going to go up next year. So, it’s a scenario which is happening more and more, in many work places because of the challenges in economy. The employer is trying to improve their business or keep it profitable by, you know, increasing their targets, making, you know, fewer employees to do more work and sometimes that target becomes reasonable and unrealistic. So, you must dissent in writing.

So, when you’re dissenting in writing, it could be as simple as one sentence saying that, “I believe the performance improvement plan is unfair and I do not agree with it” and that may be sufficient or you can provide a bit more explanation as to why you think the plan is unfair... but you don’t need to get into a lot of detail as long as you put it in writing that you dissent, you disagree with the performance improvement plan and that your goal is you’re open to the idea that you sit with the employer and discuss this... then you leave it up to the employer to figure out whether they would like to have a meeting with you or a discussion to that effect. So, that’s the dissent in writing and the reason to do that in writing is because you want a documentary trail... where it’s not your word against the employer or the HR person, but there is a document that indicates that you disagreed with that.

Now, I get often this question from employees that they are very reluctant to dissent or say anything negative about the performance improvement plan because they’re concerned that they may end up losing their job at this stage, but my advice always is that you must decide if it’s unfair... even if you believe that employer will end up terminating you because once the performance improvement plan is in place, you are already in the direction of going to termination anyways. The train is leaving the station and so, you have to dissent it because if you don’t, then implicitly you are acknowledging that you have those deficiencies in your performance and then later on if you are dismissed... regardless of whether you improved or not, it will be hard for you to argue at that stage that the performance improvement plan was unfair because the employer will argue that you’re now complaining only because you couldn’t meet the targets. So, I think, whether you believe that you will be terminated just as soon you have dissented or that dissent is in place but you may be terminated later down the line... I think the smart approach is to do the right thing and dissent it at that time and if the employer chooses to terminate you, then so be it... your termination rights are preserved.

So, it’s the second part that I want to mention, is that you must document everything because performance improvement plans can be tricky... there’s a lot of detail in it. What are the targets? How many other people are meeting those targets? Are you the only person who’s not meeting those targets? Why are the targets unrealistic? How many calls you have to make to get one client for a credit card application and so on, and so forth.

So, the more you document this information about what is happening, why the performance improvement plan is unfair, what is happening during the time when you’re in performance improvement plan, the better off you will be because you will have more evidence, if this matter ever goes to trial... but if you don’t document it, then you’re relying simply on the employer’s documentation to prove your own case... which is usually difficult.

A third part that you want to remember is that you do want to comply in good faith. So, even though you are dissenting, you’re protesting, that’s not fair. After after having documented and lodged that dissent, you must comply in good faith. So, on one hand, you’re saying it’s unfair but on the other hand, you’re saying I’m going to try it in good faith to see if the performance challenges are met, even if they are unrealistic and I’ll try it... and that’s important because that will put you in good stead with the judge who will be reviewing your matter in trial.

So, the most important thing you want to carry is that if you are getting an unfair performance improvement plan, you must respond, you must voice your dissent, and have that documented... and you want to make sure that you have documentation in place. Document stuff at your home, write it down in your diary, and make sure that you don’t copy any confidential information from your employer... but at least document what’s going on as your own log at home and not on your work computer. Then, you want to make sure that your rights are preserved, if there is a dismissal, so, that you get a without cause dismissal and you get your termination and severance rights. So, those are the things to keep in mind with respect to performance improvement plans. If you have any more questions, any comments, please feel free to contact us and we look forward to seeing you in the next lecture.

Share this:

Comments are closed.