Best Practices for Employee Termination
By WetFeetWetFeet

At one time or other, every organization finds it necessary to fire an employee. In today's litigious culture, however, many employers are concerned that former employees may respond with legal action.

While there is no guaranteed method for avoiding a lawsuit, employers can decrease the chance that a former employee will sue, and ensure a powerful defense in the event that a termination is disputed, by following a few guidelines.

Contractual Versus At-Will EmploymentEmployment relationships fall into two major categories: contractual and at will.

Union employees hold contracts, as do some executives. Terminations must always be in accordance with the terms of the contract, if one exists. Most employers require employees to sign "at will" agreements. In the absence of a contract, a relationship is presumed to be at will.

An at will relationship is one in which either employer or employee may terminate the relationship at any time, without notice or cause. In reality, however, there are some restrictions:
· An employer may not fire an employee due to his or her gender, race, national origin, or mental or physical disability that does not affect the employee's performance.

· Most states prohibit firing an employee for taking time off to serve on a jury or testify in court, reporting the company's health or safety violations, reporting abuses of power, or performing legal activities off-premises (including membership in a political party, or the consumption of legal substances such as alcohol).

· Many states stipulate that all contracts (including at-will relationships) carry an implied covenant of good faith and fair dealing. This means that although the law allows an employer to terminate an at-will employee without cause, certain terminations that can be perceived as breaches of faith may provide grounds for lawsuits. For this reason, it is advisable to fire with cause whenever possible, and to document poor performance or disciplinable offences as they occur.

AVOIDING PROBLEMS WHEN TERMINATING EMPLOYEES
William F. Murphy, a partner at Dillingham & Murphy in San Francisco, is a specialist in employment litigation and employment counseling. He argues that a work environment governed by fairness and respect is the best safeguard against potential lawsuits.

"In a workplace where employees perceive they get a fair shake, you're a lot less likely to get a lawsuit than in environments that are perceived as autocratic, unfair and ad hoc," Murphy says.
Employers can prevent later trouble by establishing principles of fairness early on. Murphy suggests the following concrete measures to ensure a fair and respectful work environment:
Progressive discipline. Under this type of system, the consequences for offenses become progressively more significant if behavior does not improve.

This structure allows the employee the opportunity to make improvements and prevent further disciplinary action (including dismissal). Conversely, if the employee's performance does not improve, he or she will be prepared for the consequences.

Certain offenses that qualify as cause for immediate dismissal need not be subject to the progressive discipline structure. These may include any number of offenses designated beforehand by the company (for example, stealing, using drugs or alcohol on company premises, or endangering the safety of others).

Explicit discipline policy. The company's personnel manual should include an explicit discipline policy establishing standards of behavior, outlining the progressive discipline structure, and enumerating any fireable offenses.

Consensus decision-making. In order to ensure fairness and prevent lawsuits, termination decisions should be made by consensus. Moreover, the people making the final decision should not be involved in a direct conflict with the employee. "Isolated thinking is a good recipe for a lawsuit," says Murphy.

HOW TO FIRE AN EMPLOYEE
There is no easy way to fire an employee. The person must be treated with compassion, yet it is essential to give an honest and thorough account of the reasons for dismissal. While approaches may differ, here are a few practical considerations that all managers should take into account:
Final paycheck. Some states require that the employer present the employee with his or her final paycheck, as well as payment for all unused vacation and paid time off, at the time of termination. Failure to comply can result in penalties equaling up to 30 days of the employee's salary.

Transition counseling. Most experts recommend that companies offer transition counseling to terminated employees. This counseling should provide information on how to collect unemployment (if applicable), as well as information on other important resources for job seekers.

Larger companies usually offer counseling through their human resources department. In smaller companies this may be handled by the office manager.

Severance package. In some cases, especially if an employee is terminated after several years of service, it may be beneficial to offer a severance package. A small gesture of support can promote mutual respect and fair dealing, and decrease the chance of retaliatory legal action.

Timing. Most authorities agree that it is best to terminate an employee early in the week. This gives the employee an early chance to make contact with prospective employers, as well as time to cool off before the weekend.

Witness. In order to safeguard against possible allegations of misconduct or unfair treatment, it is advisable to have a witness present at terminations. You may also wish to show the employee a document stating the reasons for the termination, and have him or her sign it.

MAINTAINING COMPANY MORALE WHEN TERMINATING EMPLOYEES
Many employers are concerned about the effects of terminations on other employees. If the staff perceives a termination as unfair, it may lose confidence in management, resulting in lowered morale and an unproductive work environment.

Fortunately, the standards of respect and fairness that protect employers against lawsuits also encourage employees to be sympathetic toward management and its decisions.
No matter how carefully an employer handles a termination, there is always a chance that a former employee will initiate legal proceedings. With some planning, however, a company can greatly reduce the chance of a lawsuit. For more information, contact the governmental employment authority in your area.

Biography : WetFeet has been helping leading companies attract and retain top talent since 1994. Learn why companies like Federated Department Stores, Merrill Lynch and P&G turn to WetFeet for their Recruiting Technology, Candidate Sourcing and Consulting & Research needs. Visit us at www.employers.wetfeet.com or call 1-888-220-1087 to speak to a WetFeet product specialist.


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