Letting go of employees is never easy, but there are ways to make the situation as painless as possible
Most employers know that terminations should be handled carefully. However, mistakes in the termination process, even by well-intended employers can, and frequently do, contribute to unnecessary, protracted and expensive litigation. While each termination is different, we offer the following reminders on the “do’s” and “don’ts” of terminations.
Don’t terminate an employee on the spot unless the actions are so egregious that it requires immediate removal from the workplace, such as violence against others. In most cases, consider a suspension first in order to give you some time until you can get everything in order to manage the termination seamlessly.
Do fully understand the details about the incident(s) of misconduct, or of the employee’s performance upon which your decision is based. Oftentimes, the incidents are documented by a supervisor or manager and not the person actually handling the termination. A good pre-termination strategy is to review both the employee’s file, and all relevant policies, practices and agreements to ensure that:
- The employee either knew, or should have known, that termination could occur for the reason given.
- The employer followed all office policies and agreements.
- The employee was not singled out for discharge, but was treated the same as anyone else would have been under those circumstances.
Do review the decision to terminate. Terminations affect not only the employee, they also the employer’s bottom line. Turnover costs include not only severance pay, but also the cost of lost productivity while the position is vacant, recruitment costs, and the inefficiencies of training a new employee.
Don’t ignore the possibility of unexamined bias. Conduct periodic self-audits of your employment decisions, such as promotions, terminations and pay rates to ensure that these decisions do not suggest a pattern of discrimination that may become the subject of litigation.
Do calculate any wages that will be due for work already performed, and have a check prepared. In Arizona, wages may include sick time, vacation time, commissions, bonuses, or any other type of compensation. For involuntary terminations, Arizona law also requires that any wages due be paid within three working days, or at the next regular pay period, whichever comes first.
Don’t go into a termination meeting without knowing what you are going to say. Allow approximately 10 minutes for the meeting, and have an opening statement prepared that will set the tone for the meeting, briefly explain the reason(s) for the termination, and the effective date. Explain any final pay and any severance benefits that will be offered. Explain any continuing obligations to protect confidential information, and address any possible security issues. Provide this information in writing to the employee, since he may not recall the specifics during what may be a difficult experience.
Don’t do it alone. Have a second management person come in and take notes, so you can focus on the conversation. Respect the privacy and confidentiality of everyone involved by meeting in a private area.
Do be honest with the employee. Avoid offering reasons that are inaccurate or untrue. If you do not have any intention of rehiring the employee, don’t suggest it.
Don’t suggest that the decision was unfair or improper.
Don’t insist that the employee sign a severance agreement on the spot, or discourage him from seeking legal advice. Give the employee adequate time to consider the amount being offered, and the associated releases. Otherwise, the validity of the agreement may be subject to challenge.
Do treat the employee respectfully and think about what you can do to ease the transition. An appropriate letter of reference or financial assistance toward outplacement are not only nice gestures, they may even reduce any damages an employee could later claim.
Don’t be impersonal when terminating an employee. By following the advice above, you will be able to be both professional and empathetic.
Do consider consulting legal counsel before terminating an employee. In many instances, a call to legal counsel that understands your business specifically can prevent expensive mistakes.
Most wrongful termination lawsuits can be easily avoided by following these simple do’s and don’ts. Understanding the path that needs to be followed to termination can save any business a lot of pain and financial burden.