The authority's Programme for Alternative Vocational Education (PAVE) has achieved an 85 per cent success rate in helping its trainees into employment or further training.
The 19 trainees who completed the latest PAVE programme in May all left with Standard grades in English and maths, plus a minimum of two SQA modules.
Seven progressed to the local "get ready for work" programme, three have gone on to full-time employment, and others have a full-time college place, joined the army, or gone on to training, apprenticeships or part-time work.
Donald Mackay, director of education for Midlothian, believes the quality of staff on PAVE and the fact that it isn't in school are keys to its success.
The programme is one-third education, one-third training, and one-third work experience and is aimed at youngsters in S4 or S5 who are at risk of being excluded from school, or are school refusers.
The council also offers a separate vocational education programme in five of its six mainstream schools for S3 and S4 pupils. They can opt to reduce the number of Standard grades and pick up a vocational programme - usually half a day on courses such as hospitality, health and beauty, construction, or sport and leisure.
That programme is delivered by Midlothian Training Services in schools and by Jewel and Esk Valley College.
Mr Mackay acknowledges that a lot is already happening in vocational education across Scotland, but says it is not uniform.
"There may be some youngsters for whom a separate academy approach is right," he added. "But we don't want a two-tier system where youngsters don't all feel part of the same group."
Neil Symington, 18, from Gorebridge, was a trainee with PAVE for a year, when he was 15. He has gone on to use the skills he learned through the programme to gain full-time employment as a trainee gardener with Midlothian Council.
He said: "PAVE changed my view on life to be more positive and helped me work out what I wanted to do. I learned new skills such as welding, better communications with others, and also got SQA modules and Standard grade maths and English, which have been really useful.
"PAVE was a good option for me when I wasn't getting on well at school and I enjoyed it and benefited from it."