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While no federal or state law requires you to create and follow a progressive discipline policy, courts often come down hard on employers that promise progressive discipline but fail to deliver it. In fact, many employee lawsuits stem from the employee’s perception that he or she didn’t receive a “fair” deal.

That’s why the most reliable way to protect your organization from wrongful termination charges is to establish a progressive discipline system and make sure your supervisors enforce it.

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An increasing number of lawsuits have been filed in which terminated employees complain that employers have violated their own progressive discipline policies by firing the employee before working through all the rungs on the progressive-discipline ladder.

That’s why your policy should include language allowing you to skip progressive discipline and fire employees right away for particularly egregious behavior.

How to comply

While it’s usually your right to terminate at-will employees at any time for misconduct or lax performance, a progressive discipline policy lets you make clear that problems exist and need improvement.

How it works: Your policy simply increases the severity of a penalty each time an employee breaks a rule. Typically, a policy progresses from oral warnings to written warnings, suspensions and then termination.

That way, employees won’t be surprised when they reach the end and are fired. By taking the surprise out of the firing, you lessen your exposure to a wrongful termination lawsuit. Before drafting a discipline policy, make sure employees possess clear job descriptions and an employee code of conduct. It’s critical that they know exactly what’s expected of them.

Five-step model policy

Here are the five standard pieces of progressive discipline:

  1. Oral warning/reprimand. As soon as supervisors perceive performance or behavior problems, they should issue oral reprimands. Ask the worker if any long-term problems or skill deficiencies need correcting.

    Make sure the supervisor keeps detailed (and dated) notes on the reason for the warning and the response. This step is vital. Don’t assume that managers will remember specifics about disciplinary actions—or even remain employed by your organization—when a complaint makes its way to court.

  2. Written warning/reprimand. If the problem persists (or more problems emerge), supervisors should meet with the worker and provide a written warning that details the problem and the steps needed to improve. If possible, ask another person(a management-level employee or HR rep) to sit in on the meeting.

    The written warning should summarize the issues discussed, set a timeline for action and describe in detail the corrective steps agreed upon. Explain the standards that will be used to judge the employee.

    Also explain the consequences of continued poor performance, including termination. Require employees to sign this form, acknowledging that they’ve received it. Place the document in the employee’s personnel file.

  3. Final written warning. If the performance doesn’t improve, deliver a final written warning, possibly including a “last chance agreement.” Show the worker copies of previous warnings, illustrating specific areas in which he or she must improve. Specify the time period and, again, obtain the employee’s signature on the warning.

  4. Termination review. If problems continue, supervisors should notify HR. In general, supervisors shouldn’t hold solo firing authority. However, to preserve supervisors’ exempt status under the Fair Labor Standards Act, they should have significant say in hiring and firing decisions.

    Some organizations suspend employees while they investigate and decide whether to terminate. Before acting, make sure that your disciplinary measures are consistent with those you’ve taken in other similar situations. If you don’t, a court could say illegal age, sex or race discrimination was the true reason for your actions. Document your action and reasoning.

  5. Termination. If you make the decision to terminate, meet with the employee and deliver a termination letter that states the reasons for dismissal.  

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