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Firing an Employee: Legal vs. Illegal
Most states have “at-will” employment laws in place. This means that an employee is not under contract for a specified period of time with their employer, and the employer retains the right to terminate an employee “at will,” or as they see fit. Sometimes this is referred to as for “good, bad or no reason at all.” But even if you are operating under at-will employment, firing people is not simple. In order to protect your company from potential liability and lawsuits, you need to be sure you are acting legally.
Before you recommend a termination, make sure you are acting in a manner consistent with how other employees have been treated. Are men treated the same as women? Are older workers treated similarly to younger workers? Are people of color or with disabilities treated like the rest of the employee population? Being consistent in when and why you terminate employees plays a big role in not only how your company is seen in general, but also in the number and types of legal claims you’ll need to defend.
This is where a good employee handbook is essential. Do you have the rules of conduct clearly laid out? Do you have a defined performance management process? Do you have an acknowledgement page that the employee signs to confirm their understanding of the contents of the handbook? If your answer to any of these questions is no, go to our article on employee handbooks! If you answered yes, then ensure that you are (and have been) following your own policy and commitments to the employee. A lack of compliance with your own policies can be used against you in an Equal Employment Opportunity suit.
Reasons to Fire an Employee
The most common reasons to terminate an employee have their roots in either conduct or performance, but there are many other reasons employment may end. Before you decide to fire an employee, be sure that you have gone through all of the facts in accordance with your internal policies and processes and have considered alternatives before resorting to termination. As a rule, termination should never be a surprise to an employee. They may not want to admit it, but they should see it coming. Basic reasons for firing someone include:
- Behavior. Policy violations or misconduct.
- Performance: as the final step in a corrective action process.
- Job elimination. A division closure, reduction in workforce, or a restructure.
- Temporary status. A seasonal or temporary assignment concludes.
How to Fire an Employee
Being fired is usually a traumatic event, regardless of cause. Someone is losing their income, and all of the other things that are associated with having employment, involuntarily. It’s when employees feel that they have been treated unfairly or have been degraded or humiliated that they tend to seek legal action. Because of this, it is critical to be prepared, be brief and to the point, and work to keep the employee’s dignity intact at all times.
Step 1: Be straightforward
Begin by advising the person that you have reached the decision to terminate, and tell them why. Don’t leave them wondering why they’ve been summoned to meet with you. Be direct, concise and empathetic. (Note that empathy is not sympathy.) Ensure you cover the data points that illustrate where they were coached, redirected, or reprimanded along the way that led to this decision to separate. What is happening and why it’s happening should be very clear to all parties.
Step 2: Listen
Give the employee a chance to explain their understanding of the decision to terminate. Allow them to react. Hear them out.They could be emotional, angry, quiet, aggressive or any other response. Be sure this doesn’t turn into a negotiation: this decision is final.
Step 3: Practical Details
This list will be unique to your company, but here are common items on it:
- Be sure to collect all company property (a checklist comes in handy here).
- Remind them of your company’s referral policy (sticking to name, title, and dates of employment is a safe bet).
- Explain their right to apply for unemployment and the process by which to do so.
- Advise them that they will receive information on the continuation of health benefits, 401K or pension plans, other insurance and the like by mail.
- Get their current forwarding address. Often, their personnel file is not updated, so this is critical.
Step 4: The Leavetaking
Explain to them how you would like them to exit the building (they may ask whether or not they will be able to say any final farewells to teammates). Finally, share with them how you plan to cascade the news to their former team, other internal people, and/or customers. Remember to be respectful and keep the employee’s dignity intact.
What to Do After You Fire an Employee
After the termination has been conducted and you’ve had a chance to exhale, begin the internal communication.
Step 1: Communication
Determine who needs to know. Consider the employee’s workgroup/team, other internal employees, and internal and/or external customers. Deal with each group separately and show sensitivity. Be concise and brief, allow for reactions, and be prepared to address them.
Step 2: Transition the Work
Have a transition plan in place for the employee’s workload. Clearly communicate it to any and all impacted parties, both internally and externally.
Step 3: Document the Meeting
Write a recap of the termination meeting for the person’s file. Note the reason for the termination and the efforts the company made along the way.
Questions You’ve Asked Us About Firing An Employee
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