Addressing employee misconduct: Progressive discipline and termination explained

Addressing employee misconduct is essential for maintaining a positive work environment. Progressive discipline provides a structured approach that allows employees to understand and adjust their behaviour while ensuring employers uphold their standards. This article will explore the principles of progressive discipline, the steps involved and the importance of conducting thorough investigations before implementing any disciplinary action.

What is progressive discipline?

Progressive discipline is a structured, step-by-step approach to addressing employee misconduct. This approach gives employees an opportunity to improve by providing them with a clear path to improvement, so they understand the problem, the expectations and the consequences. Employers should keep detailed documentation of any notices, conversations or warnings they provide to the employee, as this can help with disputes that may occur at the time of termination.

Progressive discipline is not:

• Performance improvement plans: used for long-term performance concerns rather than immediate disciplinary action for misconduct  
• Accommodation reports: designed to assess and implement workplace accommodations under human rights law  
• Harassment investigations: focused on investigating complaints rather than disciplinary steps  
• Coaching and mentorship: a developmental tool rather than a disciplinary measure
• Retaliation or punishment: as discipline should be corrective, not punitive 

Investigating misconduct before discipline

It is important to conduct a fair and thorough investigation when misconduct has occurred and an employer is looking to take disciplinary action. The extent of the investigation will depend on the misconduct. For example, if an employee is continuously late, there may not be as much investigation as there would be with an argument between two employees or the improper use of machinery at work that puts multiple employees at risk.

The key steps to an internal investigation involve:

1. Gather facts: Find out what is alleged to have happened by looking at time records, emails, cameras and other resources.
2. Speak to witnesses: Interview anyone who may have direct or indirect knowledge of the misconduct. Be consistent with the questions, establish credibility and ensure no one is unfairly targeted.
3. Give employees a chance to respond : If an employer believes an employee has committed misconduct, present the allegation with the facts of what the employer believes has been done. Give the employee a chance to speak about what happened. 

Key principles of progressive discipline

Progressive discipline only works and holds legal weight if it is grounded in the following key principles that make the process fair and credible:

• Fairness and consistency: Having a clear policy in place and treating situations the same every time will strengthen your progressive discipline process.
  
• Documentation: Carefully document any verbal or written warnings, termination decisions or other relevant documentation.
  
• Clear communication: Employees can’t address what they don’t understand. Communication should be clear and respectful. Avoid vague language and unclear expectations.
• Employee awareness of expectations and consequencesEmployers need to make it clear to employees what the issue is, what needs to be changed, provide a timeline and specify the consequences of not following through.

The progressive discipline process

Step 1: Verbal warning

While this step is informal, it plays an important role and should be documented. This is not a casual statement made by a manager. It is a structured conversation where the employer communicates the issue, outlines the expectations going forward and identifies the consequences of continued misalignment. This creates transparency and gives the employee the opportunity to make changes. Although verbal, it needs to be documented by adding a note to the employee’s file that includes the date, a summary of the issue, who was present for the conversation and what was discussed. Issues may be resolved at this stage and may not need further escalation.

Step 2: Written warning

The written warning is typically used when there is no resolution after a verbal warning. This formalizes the concern and outlines the significance of the issue. It signals to the employee that the employer is escalating the problem and expecting changes soon.

A written warning needs to be specific about what should change. The employee should acknowledge the written warning with a signature before it enters their file. This does not mean the employee agrees with the action but that they are aware of the expectations moving forward.

Step 3: Suspension

Suspension should be used carefully and consistently in similar cases. Suspension may be appropriate when prior disciplinary measures have not resulted in a resolution or when the misconduct is significant enough to warrant immediate temporary removal from the workplace.

Step 4: Termination

Termination is a significant decision and should be used when all other measures have not resulted in a resolution or when the misconduct is so significant that continued employment must end. It may also be appropriate when there has been no resolution after prior disciplinary steps or when the employee has engaged in significant misconduct or policy breaches.

To support fairness during this procedure, employers must conduct an objective investigation and give the employee a chance to respond to any allegations. Termination decisions should be defensible, fair and aligned with how similar situations have been treated.

How to terminate

Just cause termination

Just cause termination means the employer is ending the employment relationship without providing any notice, severance or pay in lieu. The legal threshold for just cause is high, and courts in Canada expect employers to prove that the employee’s conduct reasonably damaged the employment relationship.

With cause termination

With cause termination means that the employee is dismissed without any notice or severance. This is reserved for significant misconduct where the employment relationship has been irreparably damaged. The burden of proof is on the employer, and the employer must meet a high legal standard. If a court finds out that the cause of termination was unjustified, the employer may face severance obligations and potential bad-faith damages or reputational harm.

Without cause termination

Without cause termination allows employers to end the employment relationship for any lawful reason as long as proper notice or pay in lieu is provided. This route may carry less legal risk, especially if the notice provided meets or exceeds the employee's statutory and contractual entitlements; however, it may require a higher upfront costs in the form of severance or termination packages. Even so, with the higher costs, this can be a more predictable and manageable option.

Termination best practices

How you handle the termination process matters for compliance and preserving your dignity and professionalism.

• Prepare for the conversation: Know what must be said and how questions will be handled. Ensure all necessary documents are ready, including the termination letter, final pay summary and relevant policies. Consider a private space, and schedule the meeting at the start or end of the day.
   
• Deliver the message professionally: Keep the message clear, calm and respectful. Do not debate or justify the decision in detail. Stick to the key points, avoid emotionally charged language and equip the employee with next steps.
  
  
• Manage emotion and mitigate conflict: Understandably, terminations are emotional. Listen respectfully, stay calm and avoid escalating the situation. Have a second person in the room, typically HR, to support and witness the conversation.
  


• Plan for final pay, benefits and references: Create a straightforward process for issuing final pay, including vacation pay and statutory entitlements. Communicate the status of benefits and whether there is any continuation. Decide in advance who will respond to any reference requests. 

Other considerations

Discrimination actions and termination should never proceed without first considering whether a protected ground under human rights legislation may be involved. This includes disability, family status, age, race or gender. For example, if an employee’s performance is tied to a medical reason, the employer has a duty to explore accommodations before disciplining or terminating.

Employers should have enforceable employment agreements. These agreements can drastically reduce liability, set clear expectations, outline notice and severance entitlements and limit common law exposure. Employers should ensure contracts are properly drafted, signed before employment and regularly updated to reflect promotions, compensation changes or legal developments.

Maintaining clear and thorough documentation is a useful and proactive strategy. This includes notes from conversations, written warnings, performance reviews, investigation summaries and internal decision-making records. High-quality documentation shows that employers acted fairly, reasonably, consistently and in accordance with workplace policies and legal obligations.

Watch  our webinar for more details on progressive discipline and termination.

This guide is intended to be used as a starting point for questions about progressive discipline and termination. It offers practical information concerning the subject matter and is provided with the understanding that ADP does not render legal advice or other professional services.