Planning for Employee Termination

Employee Termination

In any organization, employees come and go. It is a difficult fact of life that some do not go voluntarily. Planning for employee termination can help reduce the strain on both the organization and employee, as well as reduce the risk of costly and uncertain adversarial proceedings like administrative claims and lawsuits.

Start by making sure everything relevant is in the employee’s file. Have you heard the expression “Location, location, location” to describe the three most important factors in real estate? In employment matters, the key is “Documentation, documentation, documentation.” Your HR professionals should know what to include in the file, but if your organization is too small to have an HR department or in particularly sensitive cases, it is worth speaking with a lawyer. As a general rule, it is best if the employee’s file contains a contemporaneous record of any performance issues (that is, documentation prepared at the time of the problem, not later on in anticipation of termination).

If there are special circumstances, like a disability or even an employee over 40, be even more careful with the documentation. Employees can use administrative systems like the Massachusetts Commission Against Discrimination or the Equal Employment Opportunity Commission that may result in the employer’s having to pay the employees’ legal fees!

There is no easy way to deliver the message. In most cases, it is best delivered in person by two people, one doing most of the talking in a businesslike manner, with the other being a witness. Be prepared for disappointment, anger or even tears. A sympathetic ear and a box of tissues can go a long way to smoothing over the conversation. Some employers do not care about how the message is delivered or received, since the employee is leaving? However, an unhappy employee who feels treated with disrespect or lack of dignity is the one most likely to create legal issues.

Most people are conflict averse. Some employers have been known to take extreme steps, like terminating employees by e-mail or even text messages. At one of my prior jobs, a supervisor who was supposed to terminate an employee on a Friday afternoon “forgot,” and the employee found out on Monday when the receptionist stopped putting through calls. These kinds of actions end up costing employers extra money and creating a negative reputation in the community.

Be aware of security concerns. Remove computer access, change passwords, retrieve any employer-provided mobile devices and keys and deactivate card keys. If the termination is effective immediately, do you need to escort the employee off the premises? If you have given the employee notice but termination is not effective immediately, consider whether it makes sense to restrict access to computer systems to those that the employee needs to wind down his or her work.

Finally, be aware of the true costs of termination. Although they may feel like extortion, they are the price of doing business. Your unemployment insurance premiums may be affected. You may have to pay to defend a claim and divert management time and attention. Your reputation in the community may become so damaged by the mudslinging that it becomes hard for you to hire again in the future. In some circumstances, it may be better for you to be up front about paying severance, even when there is no written employment agreement or employee handbook policy calling for it. Proper preparation and negotiation may help contain these costs.