Employee Termination: Everything You Need to Know
Employee termination occurs when an employee is separated from a company without wanting to go.8 min read
Employee termination occurs when an employee is separated from a company without wanting to go.
Definition of Termination
Employers can terminate an employee at-will, because of a specific event, or because of lack of performance. While many managers hope to evade having to terminate an employee, it can be a much easier process for all parties involved if you prepare yourself in the right way. Obviously, no one wants to be involved in the termination process; it's against human nature to cause pain in someone else.
Still, any business person knows that terminations are sometimes inevitable. When executed quickly and carefully, you can keep the company up and running in an efficient manner.
Firing Best Practices
Whenever you plan on terminating an employee, make sure someone else is in the room with you, such as an additional manager or someone from human resources. This helps prevent any untrue accusations that an angry worker might make, like changing your words or other specifics in the situation.
It's also helpful to have a mix of genders present during the conversation. When selecting a location, make sure it is private and preferably near an exit. This avoids unpleasant encounters while the terminated employee is trying to leave. It's also nice to schedule the meeting in the morning, as well as on a day earlier in the week. Provide tissues, a glass of water, and, if applicable, contact information for your employee assistance program.
Also think about issues that could arise that are specific to your company or the individual. For example, if they employee drives a company car, provide transportation options for them to go home. Keep on hand any documents that need to be signed so you can have a meeting that is as seamless as possible.
During the termination conversation, keep things short while maintaining a voice that is both relaxed but assertive. Don't give murky reasons for why you're terminating the employee -- that's a common complaint. Instead, be specific while remaining respectful. If an employee isn't doing a good job, he or she probably knows it already. By still treating them respectfully, they probably won't be as angry with you as they are with themselves.
Prepare your remarks in advance so you can control what you say. If you go on too much, you can open the door to potential legal problems. Use a written statement to speak from, which can later be placed in the personnel file.
As a rule of thumb, you should let the employee know about the termination before the first three minutes of the meeting are up. Bottom line: don't dance around the issue. No matter how much of a prelude you begin with, this is going to be an uncomfortable conversation.
After the News of Termination Has Been Said
It's no surprise that a terminated employee will likely have a lot of questions once you make the announcement. They may ask for specific examples of where they failed, or could even ask for a professional reference. They'll likely want to know about unemployment benefits or severance pay, and could even be concerned about how the news will be shared with their co-workers. Prepare for this in advance by thinking ahead about your answers. For questions about policies at the company, you can advise them to talk to HR.
Also remember that this isn't personal -- it's business. As a manger, it's your job to make sure your team is meeting the company objectives to ensure overall success. If someone isn't performing well, whether they simply can't or simply won't, then it's in everyone's best interest to find someone better suited for the position.
Still, you can help take the sting out of the news by being kind and respectful, particularly when the employee is having to work through their emotions right in front of you.
How to Terminate an Employee Without Breaking Their Spirit
A performance review can provide helpful insights as to how well matched the employee is with the organization. These check-ins over time can reveal whether or not the employee is taking to heart any of your feedback and recommendations. If you have an HR department, leverage their expertise and guidance to walk you through the process. However, it's ultimately up to you to make the decision and have the conversation.
Get to the Point Quickly
Skip the chit chat and get straight to the heart of the matter when you bring in your employee for termination. Just start off by delivering the news and make sure you state it clearly. Otherwise, the employee is liable to get confused and the painful process will just be prolonged.
You can literally start the conversation by stating, "Hi so-and-so. Unfortunately, I have some bad news today." Don't complicate things by asking how they're doing or what they did with their family this weekend. Keep things simple and straightforward.
Next, tell them the specific cause for termination in a single sentence. Maybe you're scaling back staff because of poor sales or maybe they aren't hitting their performance goals. Follow the reason up with something like, "Consequently, I have to tell you that your employment has been terminated effective today." Be sure to use the past tense rather than saying they will be terminated.
Next, outline their next steps in terms of any kind of pay, leftover benefits, vacation time that's unused, and future references. Close your monologue by thanking them for everything they've done for the company. Even if the termination is performance related, it's fair to say that everyone contributes in some way or another. It's always better to be nice.
Next, it's time for processing and questions. Remember to have your answers planned in advance so you're not caught off guard. Also, keep the meeting regarding termination short. It should take no more than 15 minutes at most. If you don't have a schedule, they could keep you there talking for much longer than necessary.
Also schedule the meeting early in the week so the terminated employee doesn't have to go home for the weekend and think about everything. Also, when you're talking after the news is delivered, don't get defensive. State the facts so that you can avoid attacks, whether they're personal or generalized. Also, don't make it about you and apologize profusely or tell them how hard this has been on you. They're having a worse day than you, so suck it up.
While terminating an employee is one of the least enjoyable parts of a manager's job, it is a necessary one. In the long run, it will make the workplace better because you get the chance to surround yourself with people who truly excel in their job. And that makes everyone happy.
Even if an employee has performance issues, it's becoming increasingly difficult to terminate people. Employees take the time to learn their legal rights and may even contact a lawyer if they think they've been wrongfully terminated. Many employees even file lawsuits against their employers either for discrimination or wrongful discharge. Be sure to cover all your bases to avoid such costly and stressful issues.
For companies in most states, employees work "at-will," meaning there is no contract for employment. This gives employers the right to terminate employees for any reason or even no reason. At the same time, employees can leave at any time.
In the event an employee is hired through a contract, you do have to abide by those terms. For example, the contract might give specific reasons for allowable termination. If there is an oral contract, you may need cause to terminate an employee. Reasons include poor performance, shirking on duties, being insubordinate or dishonest, or because of corporate downsizing.
At-will firings have been increasingly limited over recent years.
At-will Limitations Exception: Discrimination
Discrimination cannot be used to fire an employee at-will, a right that is protected under federal law. Here are things you can't discriminate against during employee termination:
age or race
Check specific state laws for additional limitations, such as sexual preference.
At-will Limitations Exception: Public Policy
Public policy reasons cannot be a cause for employee termination. For example, if an employee whistleblower reported your company to a regulatory agency, you can't fire them. Similarly, if you receive a court order to perform wage garnishment on an employee because of overdue child support, you can't legally terminate him or her.
At-will Limitations Exception: “Just Cause” Promise
By communicating to your employees that they can only be fired for just cause, or giving any other guidelines surrounding how terminations can occur, you can inadvertently create an employee contract that is implied.
The Right Way to Fire: Lay the Groundwork
To make employee termination easier, be sure to have clear expectations right from the start. Provide all employees with a detailed job description that outlines what they should doing every day or every week. Give yourself some wiggle room by also including a note to say that these tasks may be changed as the organization changes.
For rules outlining the proper way to perform a specific task, place them in a visible spot in the relevant work space. This helps employees remember their responsibilities correctly and supports your case when things aren't done the right way.
If your employee handbook states that employee termination can occur without cause, take it a step further by getting employees to sign an acknowledgement form.
While this doesn't exactly build employee morale, it can help prevent against any legal action in the future.
Avoid Wrongful Termination Suits: Use Progressive Discipline Policy
There are no laws either on the federal or state side requiring employers to implement a progressive discipline policy. However, if you don't deliver this and are sued, the court may rule in favor of the terminated employee.
Many employees who start lawsuits against their employers don't feel like they were treated fairly before being terminated. To avoid these charges, make sure your discipline system is a progressive one and get all managers on board with the program.
More and more lawsuits are coming about due to complaints that employers go against their policy surrounding progressive discipline by avoiding all the steps that should be completed before termination. A sound policy has wording to allow for circumventing discipline tactics if the employee's actions were especially egregious.
You should be able to fire an at-will employee whenever you'd like if they've committed some type of misconduct or aren't performing up to your stated standards. A progressive policy includes multiple tiers of discipline such as an oral warning, a written warning, a suspension, and eventually termination. Since the employee has progressed through several stages of discipline, there should be no surprise when the final verdict is delivered.
Beware of Constructive Discharge
Constructive discharge happens in the event an employee claims that the work environment was bad enough that they felt forcibly compelled to quit. As an employer, you can keep track of your compliance with federal labor laws so that you can avoid such claims, and expensive lawsuits to go along with them.
If you need help learning more about employee termination, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.