Living through the COVID-19 pandemic requires substantial measures, especially in the financial aspect. Since the current times pose many economic challenges, everyone has to tighten their belts and be prudent in managing their resources. Unfortunately, this situation could extend to employers and employees.
According to Vice President Kamala Harris, about 30% of small businesses have had to close shop as a direct result of the global health crisis. Inevitably, workforce layoffs are part of the deal, as well. Beyond the pandemic, letting go of misbehaving or underperforming employees may also be necessary to protect an organization’s overall interests.
Whatever the case may be, layoffs are necessary to cut out employee liabilities and save the business. But how should it be done legally? Since dismissing an employee can be a complicated process with potential ramifications, employers must do it within the bounds of the law.
In this post, we’ll provide you with an extensive guide on firing someone legally. We’ll cover relevant aspects of employee terminations, such as the rights of both parties, legal steps to take, and mistakes to avoid.
Based on the guidelines of most states, employers have the right to fire an employee under “at-will” employment circumstances. This means the person in question did not enter into a contract with the company, so the latter can decide to fire the employee at any time, regardless of whether there is a reason or otherwise.
However, at-will termination has several limitations, meaning, as an employer, you cannot randomly fire an employee. These are the exceptions for firing an at-will employee.
At-will termination does not condone discriminatory acts, so it’s considered illegal to fire someone based on their age, race or origin, sexual orientation, disability, or religion. Depending on the state’s laws on firing employees, the list of limitations may consider and add other factors.
Under this rule, you can’t terminate an employee if doing so would result in a violation of public policy. Simply put, if someone from your staff engages in an activity protected by a statute or constitutional right—such as whistleblowing or reporting your company’s allegedly unlawful conduct—dismissing the employee is illegal.
The precept here is that termination can occur only for reasons specified by the employer. However, problems may arise if there are no guidelines spelling out how and when the company will perform just-cause terminations.
In contrast with terminating at will, certain terms and conditions must be met when firing an employee based on an employment contract that outlines the grounds for termination.
A written contract specifically and explicitly describes these terms, while an oral contract implies you have a reason to fire an employee for any of the following causes: poor performance, neglect of duty, dishonest or insubordinate acts, or removal of the employee’s position, among others
As an employer, it would be best to avoid firing a worker without reasonable grounds. Should you think there’s a valid reason for terminating an employee, you must be ready to clearly articulate your position with adequate documentation.
Employee rights protect workers from wrongful termination. They also guide employers on how to approach termination legally. These rights are tied to several provisions.
As mentioned, this contract stipulates the terms and conditions of employment, including the employee’s job role and length of the assignment, pay and raise information, benefits, and other relevant categories, such as those related to the termination of employment.
Typically, employment contracts are supported by workers’ unions or collective bargaining agreements between employers and employees. Although employment contracts are not always in written form, hiring someone and working with someone automatically creates a contract between the two parties.
This refers to the official rules and regulations organizations set up to standardize how they conduct business with all concerned parties, including employees. For example, your company’s severance plan may serve as your legal protection in an impending layoff while guiding the organization on how to compensate employees due for termination.
These rights are enforced by states or the federal government. Employees’ statutory rights cover legal concerns regarding workplace discrimination and advance notification of layoffs or company shutdowns. Termination that violates these rights is unlawful.
8 Steps to Fire an Employee Legally
Termination can put both employees and employers in a challenging and uncomfortable situation. Employees are bound to lose their primary source of income and other benefits. Employers have to consider several factors, as well, from avoiding potential grudges with dismissed employees and their families to upholding labor laws.
For the latter, here are the steps on how to legally fire an employee.
1. Document the violations
Proper and complete documentation is vital in the termination process, as any reported complaint or violation against an employee needs to be supported with facts.
If the issue is regarding the employee’s performance, your documentation may include error reports or periodic appraisal results. The documentation may occur in several stages—oral warning, written warning, and final warning—to give the employees a chance to improve or rectify their errors.
If the termination is due to a company policy violation, you must secure pertinent documents like incident reports in written form and acknowledged by the erring employee.
2. Investigate the grounds for termination
This step involves reaching out to other people with direct knowledge of the employee’s offense. Here, you can interview the employee’s teammates, managers, and co-workers to gather evidence about the wrongdoing. Based on the evidence you’ve collected, you can determine if there’s sufficient basis to terminate the employee.
3. Review the company guidelines and firing policies
Your reason for firing an employee must be in accordance with the company’s rules and regulations—otherwise, your argument might not hold water.
As such, before initiating the process of termination, you must go back to the employee handbook—this should be available to all employees with proper acknowledgment receipts—to ensure there are no gray areas in the company policies for worker dismissals.
4. Suggest voluntary resignation
Voluntary resignations are less damaging for employees, as they can exit the company without getting involved in any disciplinary action. However, make sure to let the employee know that this type of resignation might prevent them from getting severance pay benefits.
5. Conduct a termination meeting
Once you’re ready to fire someone, you must request the employee to attend a short face-to-face meeting along with at least two company representatives to act as witnesses. The meeting is the proper forum for informing the employee about the impending termination and the reason for the dismissal, as well as for issuing the exit papers.
Here, you also have an opportunity to answer questions about final wages and any severance plans that the employee may be entitled to. If you decide to provide the latter, you must let the employee sign a separation agreement that indicates the release of claims.
And since issuing severance pay is not a common practice, only employees with risky termination cases typically receive this benefit.
6. Attend to post-termination activities
After the meeting, give the terminated employee enough time to retrieve their personal belongings before leaving the office building.
You’re also responsible for checking if the fired employee can no longer access the company’s computer systems, files, facilities, and the like—although you may want to do this before the termination meeting as a precautionary measure against disgruntled workers.
After the termination, you must be proactive in informing other employees about the termination on a need-to-know basis.
7. Consult an attorney
Dismissing an employee can be the last recourse in some cases. So, before you choose to go this route, consider talking to an employment law attorney.
Unlawful termination lawyers can help ensure that no employee will make a legal claim against your company—granting you’ve exhausted all the options at your disposal, ranging from internally resolving the issues to utilizing disciplinary procedures or putting back an employee on probation, among others.
8. Fulfill all legal requirements
Once you’re fully decided to let go of the employee, you need to go about the required legalities to settle unemployment benefits with the dismissed worker. For example, the Consolidated Omnibus Budget Reconciliation Act (COBRA) provides U.S. employees the right to continue their group health benefits with their provider under certain circumstances, including job loss regardless of whether it’s voluntary or involuntary.
Mistakes to Avoid
Firing someone doesn’t have to result in employers and employees having a fallout. The key is to be aware of firing mistakes that can put off both parties.
- Losing your cool – It’s normal for emotions or tensions to rise during the termination procedure, but you must control yourself from being confrontational or defensive. Stay calm, reasonable, and professional, as shouting or exchanging tirades against the dismissed employee can only make the situation more intense.
- Not playing by the rules – Employees aren’t the only ones who need to keep their side of the bargain and abide by company policies. As the employer, you must always do things following due process. If your handbook states erring employees are to be given a certain number of warnings for their slip-ups before being subjected to formal disciplinary actions and, ultimately, dismissal, then stick to those guidelines lest you be accused of railroading the case.
- Being too kind – You may feel the urge to console a worker you’re about to terminate, but be careful not to make it appear that the employee has the option to stay and keep their job in the company. By all means, be compassionate about the employee’s circumstances but make it clear that the company has to proceed with the termination anyway.
- Not watching what you say – An employee up for dismissal may take the message in a bad light. So, it would be best to have a script for the termination meeting to avoid saying things at random that might be misconstrued by the employee as discriminatory, biased, or inaccurate.
- Being a tattletale – Other employees don’t need to know why their co-worker is being fired. The last thing you want when dwelling on the details of the dismissal is to be accused of damaging the employee’s character.
- Resorting to surprises – The proper way to carry out a termination is through a series of disciplinary actions that demonstrate the employee’s deviation from company rules—not a single, abrupt event of handing the dismissal verdict. The latter is illegal, but the former builds the case progressively.
Act with Dignity
No one from both employers and employees wants to go through termination cases, but the fact remains that they’re sometimes unavoidable—even unnecessary for some. The goal is to go through the process of firing someone from their jobs legally while allowing the employee to leave the company with dignity.
Getting proper legal advice and services on terminating employees is vital. Contact Shegerian & Associates for professional assistance.