How to Fire an Employee

September 15, 2012 in , , , ,

Nobody likes to terminate employees; however, if a situation arises where termination is necessary, supervisors and managers should consider these objectives:

  1. Protect the company from legal action.
  2. Minimize the pain to the exiting employee.

Protecting the Company
It is generally considered a best practice to have all applicants complete a company employment application that includes employment-at-will disclaimer language. The hiring process can be more successful when relying on an up-to-date job description for the position. Once hired, employees should generally be given a copy of their current written job description and a copy of the employee handbook outlining company policies where applicable. Employers are encouraged as a best practice to have employees sign a form acknowledging receipt of the employee handbook where the employee attests to reading and understanding the policies. Signed receipt pages may be retained in the employee’s personnel file. (Note: the information contained here is not representative of an employer’s entire hiring process.)

In most states, where the employment relationship is not controlled by an employment contract or collective bargaining agreement, employment is generally considered “at-will.” However, all employers are at risk for claims of discrimination and/or wrongful discharge when terminating employees.

To mitigate exposure to such claims, employers should consider whether they have a specific, business-related reason for the termination which might include:

  • misconduct and violation of company policy
  • unsatisfactory performance
  • organizational change (reduction in work force)

To reduce exposure to wrongful discharge and discrimination claims, employers are encouraged to document job-related factors that led to the termination and to consult with legal counsel. Terminations may have additional legal ramifications depending on employment contracts and collective bargaining agreements.

Minimizing Pain for Terminated Employee
The way an employee is informed of his termination may impact whether the employee will sue for wrongful discharge and whether he will be able to win the suit. Consider the following steps:

  • Avoid beginning the conversation with small talk or beating around the bush. Make it clear that the employee has been terminated—tell him immediately. Make it clear that the termination decision is final and inform the employee of his or her last day of employment.
  • Avoid personal references or accusations that cannot be proven. The supervisor should always maintain a professional demeanor. In some states, an employer is not legally required to disclose the reason for termination. To do so could potentially expose your company to litigation.
  • Have a witness present, preferably another member of management or a representative from your human resources department.
  • Be prepared for the employee’s reaction. No matter how much an employee may suspect, employment termination is a traumatic event. Do not react. The employee may respond with anger or tears. The supervisor should concentrate on listening and avoid defensive comments or counterattacks to an upset employee.
  • Request the return of company property, including the employee handbook, and discuss other issues that need to be finalized.
  • Provide notification of health insurance continuation coverage and certificate of creditable coverage where required. This information should be reviewed prior to the termination meeting and handled in compliance with the law during the termination meeting.
  • Maintain confidentiality. The details of the termination should be kept confidential to the extent possible.

Make sure to address the employee’s last paycheck. Comply with state final pay requirements and let the employee know when/how they will receive their final pay check. Be sure to include earned but unused paid time off where consistent with past company policy or required under state law.

This list is not all inclusive, as it will depend on the circumstances of the separation from employment. Employers are encouraged to consult with legal counsel to review their termination procedures to mitigate exposures to litigation.

Procedures may differ where employees are represented by a Collective Bargaining Unit and/or have signed an employment contract.

This publication is designed to provide accurate and authoritative information with regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.


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