Employee Terminations

At the first sign of an employee performance issue, it is incumbent upon the corporate supervisor or manager to initiate a company disciplinary program. This includes corrective action, written records, and verbal discussions. Should the employee's performance remain outside the company's expectations, then proper follow through with a written dismissal and an exit interview is necessary for the mutual benefit of the employee and employer.

It is estimated that over 80% of all employment lawsuits arise from termination or disciplinary proceedings. Therefore, actions related to such proceedings should be undertaken carefully, responsibly, and tactfully.

Is The Termination A Surprise?
If the disciplinary program is handled properly by the manager yet not successful in changing the employee performance, then termination should not come as a surprise to the employee.

More often that not, a good predictor of a disgruntled former employee who decides to sue their employer is if the employee would be legitimately surprised with the decision to terminate his or her employment. Of course, there will always be the employee who refuses to see that he or she had ever done anything wrong, despite the employer's best efforts to place the employee on notice of its dissatisfaction with their performance. However, if the employer made every effort to notify the employee of specific performance issues through written warnings and verbal discussions, the employee should have seen "the writing on the wall" by the time the issue of his or her termination is raised. On the other hand, if the decision is "out of the blue," the employee may begin to consider whether the "real" reason behind the termination was based on unreasonable or unlawful motives.

Write It Down
The employer must maintain a written record of employee warnings and verbal discussions around employee performance and, where necessary, prepare a written separation notice stating the reason for the employee's discharge.

While virtually every manager today recognizes the need for documentation, it's lack still remains the single most common mistake in terminations. Managers must recognize that their companies may have to explain a termination decision long after it occurs. Documentation is necessary when memories are dim as to the circumstances of the termination or when the individuals involved are no longer with the employer. The absence of documentation may allow the terminated individual to create an inference that the employer’s motivation for an employment action was for reasons other than those stated.

While the need to document is clear, it is equally important that managers understand that poorly prepared documentation may well hurt an employer’s case. While there is no particular required format, the manager should ensure that all disciplinary documentation contains the following elements:

1.the date of the termination;
2.the signature of the person with proper authority to terminate the employee;
3.the signature of the employee (if presented in person to the employee);
4.the specific reason for the termination in detail;
5.notification of employee rights and the rights of any qualified beneficiaries to continue health care coverage after the termination; and
6.contact information should the employee have questions on matters contained in the termination notice.

Also, you may request that the employee
1.return employer property and/or equipment;
2.return the employer Handbook;
3.return keys, credit cards, entry cards, and/or ID cards;
4.deliver all email and computer-related passwords;
5.clean out his or her desk, office, locker, etc.;

Importantly, the employer should make certain that the reason for the employee’s termination can be substantiated. Therefore, the employer may wish to temper the reason for the termination to the actual information known to the employer at the time of the termination. For instance, if the employer desires to terminate an employee due to stealing employer funds, however, the employee has yet to be convicted of any crime, the proper termination notice would state the reason as "terminated due to suspicion of theft of employer property, " rather than "terminated due to stealing." The key word in the notice is suspicion.

The employer’s subsequent inability to prove the stated reason for the discharge understandably makes the reason suspect. Moreover, the inclusion of a reason that is not truthful may expose the employer to a defamation claim when the employer includes that reason in other documents prepared in connection with the termination.

The Termination Meeting

At the termination meeting, the manager conducting the meeting should explain as objectively and unemotionally as possible the reasons behind the employer’s decision to discharge that employee. A witness also should be present. Most importantly, the details of the termination meeting should be documented by one of the individuals present, preferably the witness who is otherwise minimally involved in the discussion. It generally is not advisable to tape-record the meeting. Instead, the employer should take notes of what occurs.

After the termination meeting, the following checklist should be considered by the employer:
1.Place the termination notice in the employee's personnel file.
2.After reviewing their accuracy, place any notations made during the termination meeting in the employee's personnel file.
3.Has the employee been compensated for hours worked and any unpaid but accrued leave that the employer agrees to pay or by law is required to pay? If not, have an appropriate cheque cut.
4.Have the pension plan administrators been contacted in order to ascertain the options available to employees, as well as the proper methods to be used in informing employees of their rights under the plan?
5.Have the appropriate Department of Labor forms regarding unemployment insurance compensation been sent to the correct agency?
6.Have the employer's property and equipment been returned?
7.Have the employee's computer and email passwords been delivered and/or deactivated?
8.Have the employee's keys, credit cards, entry cards, and/or ID cards been returned?

Beyond corrective action, one of the best ways to avoid potential future conflicts is by conducting an exit interview. This type of meeting is a highly underutilized method of learning information that may benefit the employer by finding out causes of employee turnover and also help the employer identify potential lawsuits at a very early stage and avoid them through early discussion or conciliation with the employee. An employer should take all necessary measures to insure that the discharge meeting is conducted in a sensitive and fair manner.

Given that the vast majority of employment lawsuits arise out of involuntary terminations, it is important that companies consistently assess their policies and procedures related to the discipline and, if necessary, the termination of their employees. Such policies and procedures, if created, maintained and followed by all employees, can have a substantial impact on company morale, staff performance, and the number of lawsuits a company faces.