Being placed on a performance improvement plan is one of the most unsettling things that can happen at work. You show up, you do your job, and then one day your manager sits you down and hands you a document that says your performance is no longer good enough. What does it actually mean? And what are your rights?
This post breaks down what a performance improvement plan is, what employers are legally required to do before using one to justify termination or demotion, and what three real Canadian cases tell us about where the line is between a lawful performance management process and one that crosses into legal jeopardy for the employer.
If your employer has recently imposed a performance improvement plan, you can connect with a Calgary constructive dismissal lawyer at Cashion Legal for clarity, strategy, and peace of mind.
Speak with a Calgary Constructive Dismissal Lawyer at Cashion Legal
Table of Contents
What Is a Performance Improvement Plan?
A performance improvement plan is a formal document that an employer uses to notify an employee that their work performance has been identified as falling below the required standard. It typically sets out the areas of concern, the expectations going forward, and a timeline for demonstrating improvement.
In Alberta, performance improvement plans are used for a range of issues, from attendance and communication to technical knowledge and leadership. In theory, a well-designed PIP gives an employee a genuine opportunity to address shortcomings before more serious consequences follow. In practice, many employees who receive a PIP are later terminated or demoted, which raises the question of whether the PIP was ever truly intended to help them succeed.
Does a PIP Mean You Are About to Be Fired or Demoted?
Not necessarily, but it is a serious warning that your employment may be at risk. The most common questions Canadians search after receiving a performance improvement plan include whether it leads to termination, whether they should quit, and whether it qualifies as a final warning. Those questions reflect the anxiety that comes with the territory.
The legal reality is this: a PIP does not, on its own, give an employer the right to terminate or demote you. Before an employer can take either of those steps based on performance, the law imposes several important requirements. Whether those requirements were met is where most of the legal action happens.
What the Law Requires Before a Performance-Based Termination or Demotion
Alberta courts and adjudicators have consistently held that to justify an adverse employment action based on incompetence or poor performance, an employer must establish the following:
1. The employee was given an objective performance standard.
Vague expectations like “improve your communication” or “demonstrate better judgment” are not enough. The standard must be clear, specific, and capable of being measured. A standard that requires perfection at all times may itself be arbitrary and legally insufficient.
2. The employee was told they were not meeting that standard.
The employee must have been warned, explicitly, that their performance was deficient and that their job was at risk.
3. The employee was given a real opportunity to improve.
The employer must provide adequate coaching, training, and time. If training is offered but the employee is given no meaningful opportunity to apply what they learned before the assessment concludes, the process may be fundamentally unfair.
4. The performance must be grossly deficient or the misconduct serious and sustained.
In cases of termination for cause, the threshold is high. The conduct or performance must be so serious that the outcome is clearly warranted and proportionate to the circumstances.
5. Progressive discipline was followed.
Except in the most serious cases, termination is supposed to be the last step in a graduated process, not the first. Employers are expected to warn, provide an opportunity to improve, and escalate consequences progressively before dismissing an employee.
6. Other options were considered.
Before reaching for termination or demotion, the employer should have genuinely considered alternatives such as reassignment, an extended improvement period, salary protection, or accommodation for personal circumstances affecting performance.
Performance Improvement Plan Case Studies
To demonstrate how the Courts view implementation of performance improvement plans, we will break down three real cases. The principles from these cases are applicable in Calgary and throughout Alberta.
Case 1: A PIP Used to Justify Termination
The federal adjudication decision in Smith and I.M.P. Group Ltd., is a detailed example of what happens when an employer uses a PIP as a tool to build a case for dismissal rather than as a genuine vehicle for improvement.
The employee in that case was an HR generalist who had worked for the employer for approximately seven years, four of them in the same role. Her performance appraisals had been consistently positive, with her most recent rating before the PIP reaching 3.7 out of 5.0. Her direct manager had described her in writing as an asset, someone with a strong work ethic, and a person who was “extremely knowledgeable” in key areas of her role.
Within a few months of a new manager taking over and the employee’s job assignment being restructured, the narrative reversed entirely. The employee was placed on a formal PIP and eventually terminated for cause, without notice or severance.
The adjudicator found the dismissal to be unjust for several reasons. The PIP lacked objective milestones, relying instead on subjective expectations that depended on changing the perception of her manager rather than hitting defined targets. The process was undermined by the fact that the manager who initiated it had already begun interviewing for another job before the PIP started, knew she would be leaving before it concluded, and had expressed serious doubts about whether the employee could succeed. The adjudicator found that both the initiating manager and her replacement had developed a confirmation bias that coloured every observation they made.
The employer also failed to account for personal circumstances, including a cancer diagnosis and significant caregiver responsibilities that the employee had disclosed in her own performance appraisal. And rather than exploring whether a different assignment might allow her to regain her footing, the employer concluded her skills were so deficient she could not even perform a lesser role, a conclusion completely at odds with her prior track record.
The result was reinstatement to her former position, full back pay, restored benefits, and compensation for all financial losses since her dismissal.
Case 2: A PIP Used to Disguise a Disciplinary Demotion
The 2020 decision in Kashala Tshishimbi v. Social Sciences and Humanities Research Council, 2020 FPSLREB 83, adds an important dimension: a PIP can be used not only to set up a termination, but also to disguise a disciplinary demotion as an administrative one.
In that case, an employee had received entirely positive performance evaluations from 2008 to 2012. After a major organizational restructuring in which his duties changed substantially and he was placed under new management, he was put on a six-month PIP and eventually demoted two classification levels.
The adjudicator found that the PIP and the demotion together amounted to disguised discipline. The performance standards required a 100% success rate across all assessed criteria, with any question asked for clarification during a presentation counting as a failure. The mid-term assessments were internally inconsistent, and improvements the employee demonstrably made were ignored or contradicted in the final annual review. The employer had changed the employee’s job responsibilities significantly in 2012 and 2013, adding duties previously performed by external consultants and more senior staff, but never provided targeted training for those new responsibilities and then held him to a perfection standard for work he had never been prepared to do.
The adjudicator applied a key legal principle drawn from Canada (Attorney General) v. Frazee, 2007 FC 1176: where the impact of an employer’s decision is significantly disproportionate to the administrative rationale being served, the decision may be treated as disciplinary in nature, even if the employer did not intend to punish. The absence of bad faith is not a complete answer when the process itself was procedurally unfair and the outcome unreasonable.
Case 3: How Not to Respond to Progressive Discipline
Even though performance improvement plans can be misused, this does not mean you should ignore or dismiss your employer’s concerns.
The 2025 Alberta King’s Bench decision in Rudko v. Insight Canada Inc., 2025 ABKB 513, is instructive precisely because the court upheld the employer’s termination for just cause, and the reasons tell us a great deal about what a legally sound performance management process looks like.
The employee in that case was a Sales Director with over fourteen years of service who was terminated after an eighteen-month progressive discipline process. His employer’s concerns were not about financial performance, which by some measures was strong, but about leadership gaps: poor responsiveness to his team, failure to engage in the organization’s 360 review process, lack of presence in key meetings, and persistent failure to develop his direct reports.
Over the course of that eighteen months, the employer had multiple documented conversations with the employee about the specific concerns, provided written warnings that clearly identified what needed to improve and by when, engaged Human Resources to support the process, and gave the employee multiple opportunities to provide a written development action plan with specific action items. The court found that the employer had communicated its expectations clearly and in writing, that the employee understood his job was in jeopardy, and that the direction to provide a written improvement plan was a lawful, reasonable, and proportionate response to identified performance gaps.
The employee’s response was ultimately to email “I respectfully disagree” and then advise that he was “not in a position to respond” to the deadline because the matter was under review by counsel. The court found that this amounted to an outright refusal to participate in a reasonable and clearly communicated performance management process, constituting insubordination that justified dismissal.
What distinguished this case from Smith and Tshishimbi is instructive. In Rudko, the employer provided clear, consistent, written expectations over an extended period. It engaged Human Resources. It followed a genuine progressive discipline model with documented warnings. It offered the employee help in developing the required plan. It gave the employee multiple opportunities to respond, ask questions, or seek clarification. And critically, the performance concerns had nothing to do with a new manager’s personal preferences or a sudden reversal of years of positive evaluations — they were consistent, documented, and communicated by the same manager over an extended period.
The court also dismissed the employee’s argument that praise he received for hitting financial targets should have shielded him from discipline for leadership deficiencies. An employer can legitimately identify and address gaps in one dimension of performance even where other dimensions are satisfactory. Bonus accolades tied to Canada-wide sales numbers were not a reflection of the employee’s individual leadership performance, and the court found that a reasonable person in the employee’s position would have understood that.
PIP Guidelines for Alberta Employees
Together, Smith, Tshishimbi, and Rudko draw a fairly clear picture of the legal landscape around performance management and PIPs in Calgary and Alberta.
A PIP that is designed and administered in good faith, with clear and objective standards, consistent documentation, genuine support, and adequate time to improve, can provide the foundation for a lawful termination or demotion. An employee who refuses, without good reason, to participate in a reasonable and clearly communicated improvement process takes on significant legal risk, particularly at a senior level where the duty to follow lawful direction is heightened.
But a PIP that relies on subjective or shifting standards, that ignores or contradicts documented progress, that is administered by a manager who has prejudged the outcome, that assigns new responsibilities without the training to perform them, or that serves as a paper trail toward a predetermined result rather than a genuine attempt at improvement, will not provide legal cover. When the impact of the outcome is disproportionate to the stated administrative rationale, and when the process reflects a lack of good faith or procedural fairness, the courts and adjudicators will look past the label and assess what was actually going on.
If you have received a PIP, consider the following questions:
- Were the performance criteria clear, specific, and measurable? If the plan required you to “demonstrate better judgment” or “improve your communication” without defining what that means in practice, the employer may not be able to establish that you failed to meet a legitimate standard.
- Were the assessments consistent? If mid-term reviews acknowledged progress in certain areas but those improvements were ignored or contradicted in the final assessment, that inconsistency is legally significant.
- Did the employer change your job without providing the tools to do it? If your role expanded significantly before the PIP was imposed, and you were never given training for the new responsibilities, the employer’s conduct may have contributed to the performance gaps it is now holding against you.
- Were you genuinely given time and support to improve? A training course offered with four months remaining in a nine-month PIP, without any follow-up on whether it actually helped, does not satisfy the duty to provide adequate assistance.
- Did the employer consider alternatives? Progressive discipline requires escalation before termination. If the employer skipped reassignment, an extended improvement period, or demotion with salary protection without genuinely exploring those options, the outcome may be disproportionate.
- Were there personal circumstances that went unaddressed? If you disclosed health challenges, caregiving responsibilities, or other personal pressures during the performance management process and the employer took no steps to inquire about accommodation, that is a factor a court or adjudicator would weigh.
- Do you understand what is being asked of you? The Rudko decision is a reminder that an employee who understands what is being asked, who has had multiple opportunities to seek clarity, and who chooses not to engage with a reasonable improvement process may find themselves without a legal remedy. If you have genuine confusion about what your employer is expecting, raise it clearly and in writing.
When a PIP May Be Discriminatory
A PIP does not exist in a legal vacuum. If the decision to place you on one was connected, even partly, to a protected characteristic under the Alberta Human Rights Act, the legal analysis changes considerably. Protected grounds include disability, mental health conditions, age, gender, pregnancy, family status, and race, among others.
A few patterns commonly raise human rights concerns: a PIP introduced shortly after an employee discloses a medical condition or returns from a protected leave; performance standards that fail to account for a disability affecting the employee’s output; or a process applied more harshly to one employee than to similarly situated colleagues without a shared protected characteristic.
Where a disability or medical condition is contributing to the performance issues cited in the PIP, the employer has a legal duty to accommodate that condition to the point of undue hardship before proceeding with discipline or termination. An employer who skips that inquiry and moves straight to a PIP and dismissal risks not only a wrongful dismissal claim but also a human rights complaint.
These two avenues are distinct and can be pursued simultaneously. Human rights remedies include compensation for injury to dignity and self-respect, on top of any wrongful dismissal damages. Note that complaints to the Alberta Human Rights Commission must generally be filed within one year of the discriminatory act, so getting legal advice early matters.
Should You Sign the Performance Improvement Plan (PIP)?
Signing a PIP generally means you acknowledge having received and read it, not that you agree with its contents. Most PIPs include language to that effect. However, you should read the document carefully before signing, because some contain admissions or waivers you may not be comfortable with. If you have concerns about the language in a PIP, getting legal advice before signing is a reasonable step.
What Happens If You Are Terminated or Demoted After a PIP?
In Alberta, employees who are terminated without just cause are entitled to notice or pay in lieu of notice under Alberta’s Employment Standards Code and at common law. If an employer claims just cause based on performance and cannot meet the legal threshold, the employee is entitled to full severance.
A demotion following a PIP can also give rise to a constructive dismissal claim in certain circumstances, particularly where the change in role and compensation is significant and the employer’s conduct in the performance management process was unreasonable or procedurally unfair.
Whether a PIP was administered in good faith, whether the standards it imposed were objective and proportionate, and whether the outcome was consistent with the evidence of actual performance, are all questions that matter enormously in determining what remedies may be available to you.
Speak With an Alberta Employment Lawyer
Receiving a PIP is stressful, but it does not have to define what comes next. Understanding your rights, asking the right questions early, and getting advice before things escalate can make a significant difference in the outcome.
If you work in Alberta and have received a performance improvement plan or been terminated or demoted following one, the employment lawyers at Cashion Legal can help you understand whether your employer met its legal obligations and what options are available to you. Contact us to book a consultation today.
FAQ’s About Alberta Performance Improvement Plans
1. Does a performance improvement plan mean I am going to be fired?
Not automatically. A PIP is a formal warning that your employer has concerns about your performance, but it does not give the employer an automatic right to terminate you. Before a termination following a PIP can be justified, the employer must show that it set objective standards, gave you a genuine opportunity to meet them, and considered alternatives to dismissal. Many PIPs do not result in termination, and some that do lead to successful wrongful dismissal or unjust dismissal claims.
2. Should I sign a performance improvement plan?
Signing a PIP typically means you acknowledge having received and read it, not that you agree with its contents. Most PIPs include language to that effect. However, you should read the document carefully before signing, because some contain admissions or waivers you may not be comfortable with. If you have concerns about the language in a PIP, getting legal advice before signing is a reasonable step.
3. Can I be fired for cause after a performance improvement plan?
An employer can attempt to dismiss you for cause following a PIP, but the legal threshold is high. The employer must establish that it set clear, objective performance standards, communicated them to you, gave you adequate time and support to improve, and that your performance was genuinely and seriously deficient. If the PIP relied on subjective or shifting expectations, was administered by a manager who had prejudged the outcome, or was used to build a paper trail toward a predetermined result, a court or adjudicator may find the dismissal was unjust.
4. Can an employer use a PIP to justify a demotion instead of a termination?
Yes, but the same legal requirements apply. A demotion following a PIP must be a proportionate and genuine administrative response to legitimate performance concerns, not a disguised form of discipline. Where the impact of the employer’s decision is significantly disproportionate to the stated administrative rationale, the outcome can be treated as disciplinary in nature regardless of how the employer labels it.
5. What is the difference between a PIP and a written warning?
A written warning typically documents a specific incident or ongoing concern and puts the employee on notice that continued problems could lead to discipline. A PIP is more comprehensive and structured, setting out categories of performance concern, the standards expected, the actions both the employer and employee will take, and a timeline for review. A PIP generally signals a more serious and sustained concern than a single written warning, and in most cases should be preceded by earlier, less formal steps as part of a progressive discipline process.
6. Can a performance improvement plan be considered constructive dismissal?
In some circumstances, yes. If a PIP imposes unreasonable or fundamentally altered working conditions, such as stripping an employee of responsibilities, placing them under constant surveillance, or setting impossible standards, it may cross the line into constructive dismissal. If you’ve been placed on performance improvement plan, connect with the employment lawyers at Cashion Legal to book a consultation today.The same is true if the employer changes the employee’s role so significantly in connection with a PIP that the job being assessed is materially different from the one originally accepted.
7. What should I do if I receive a performance improvement plan in Alberta?
Start by reading the PIP carefully and noting whether the expectations it sets are specific and measurable, or vague and subjective. Check whether the standards being applied are consistent with how your performance was assessed before the PIP was introduced. Keep records of your own communications, including evidence of work you completed and positive feedback you received. Engage with the process in good faith and document your efforts in writing. If you have genuine confusion about what is being asked of you, raise it clearly and in writing with your manager. Most importantly, consider speaking with an employment lawyer early, before the PIP period concludes, rather than waiting to see how it resolves.
8. How long should a performance improvement plan last?
There is no fixed rule, but the duration should be reasonable given the scope of what the employer is asking the employee to improve. A plan that assesses an employee on a particular responsibility for less than three months, sends a final warning twelve days after that assessment begins, and then proceeds to demotion without allowing meaningful time to apply any training received, is unlikely to satisfy the legal requirement to give the employee a genuine opportunity to improve. Courts and adjudicators have found that overly compressed timelines can undermine the fairness of the entire process.
9. What happens if I refuse to participate in a performance improvement plan?
An employee who understands what is being asked of them, who has had multiple opportunities to seek clarification or assistance, and who nonetheless refuses without good reason to engage with a reasonable improvement process takes on significant legal risk. Getting legal advice early gives you the best chance of protecting your position while remaining engaged.
10. Does strong financial performance protect me from discipline under a PIP?
Not necessarily. An employer can legitimately identify and address performance gaps in one dimension of a role, such as leadership, communication, or team management, even where the employee is performing well on other financial metrics. If the performance concerns your employer has identified are real and documented, the fact that your sales numbers are strong will not, on its own, defeat a just cause argument.
About Cashion Legal
Cashion Legal is a Calgary employment law firm that works with employees navigating some of the most stressful moments of their careers. If you’ve been placed on a performance improvement plan, we can assist you with this.
We provide clarity by explaining exactly where you stand and what your rights are under Alberta law. We deliver strategy by building a plan tailored to your situation, not a one-size-fits-all approach. And we offer peace of mind by handling the legal weight so you can focus on what comes next.
If you are ready to understand your options, contact Cashion Legal today. Talk to an employment lawyer