Terminating an employee is never an easy decision to make, even when it’s necessary. It's important to ensure the termination process is handled correctly in order to avoid legal issues and protect the business.
This article will provide guidance on how to terminate an employee the right way, including tips on how to communicate with them, which legal considerations must be taken into account, and how to handle their transition out of the company.
Organizations may consider terminating an employee for the following reasons:
Regardless of the reason, the correct process for terminating an employee depends on the type of employment agreement in place:
Before an organization decides to terminate an employee, it should consider implementing a corrective action plan. This enables two possible outcomes; (1) the employee corrects the identified issues, or (2) the employer has the documentation to demonstrate the validity of the termination.
The following steps serve as a guide for developing corrective action plans:
Improper termination always risks severing a relationship and damaging your company's reputation. For example, improper termination may lead to poor online reviews on sites like Glassdoor, affecting your recruitment. However, the most damaging outcome is if the employee pursues legal action against your business. Organizations can mitigate their risk by following the steps listed above.
Clearly documented and signed policies and expectations, training, and records of corrective action plans will provide you with a robust, evidence-based defense.
Unfortunately, terminating employees is part of running a business and managing your workforce. When that happens, you’ll want to keep these best practices in mind.
In most cases, employees at risk of termination due to poor performance recognize their circumstances, and they’re less likely to blame the employer if the organization handles the process well.
Employers should never facilitate or participate in an argument while holding a termination meeting. Employees may use an argument’s contents as motivation for legal action or as evidence. If an employee initiates an argument, stay calm and simply reiterate that the decision is final.
To help you remain calm and objective, always include a witness. The witness' responsibilities should exclusively focus on documenting the meeting for legal purposes rather than participation in the conversation. However, if de-escalation is necessary, they can also provide another perspective and help calm the employee.
Meeting face-to-face helps ensure the employee’s acknowledgment of their termination and accurate communication. It also demonstrates professional courtesy and imparts compassion — influenced by body language and inflection — for the employee’s situation. Written terminations carry significantly more opportunity for misinterpretation or perceived malice.
If you can’t meet with the employee face-to-face, schedule a video call to avoid miscommunication.
Managers who say too much during a termination may say something that exposes the organization to legal issues. Keep the discussion to the essentials, reiterate the decision is final (if warranted), and prepare a written statement that summarizes the verbal termination notice, the cause, the date, and the return of personal effects or company property.
Use the written statement to guide the meeting, remain focused, and prevent emotions from escalating. After the meeting concludes, file the statement in the employee’s personnel record to officially document the given notice.
Both organizations and employees find surprise terminations the most challenging to navigate due to the potential for intense emotions, perceived unfairness, and legal action. If a sudden termination follows employees violating a zero-tolerance policy, you should stress the policy, document any comments, and inform them of their termination as soon as possible.
Maintaining thorough documentation allows an organization to easily demonstrate just cause for termination during the termination meeting and if legal action follows. With documentation, you can point to the employee’s performance challenges or violations and your company’s attempts to help correct the issue.
Corrective action plans should serve as a reference when preparing the written statement and during the meeting regarding the termination’s cause. They provide the official record of behavior and help summarize which corrective efforts took place. If needed, refer to past meetings with dates and relevant feedback.
A comprehensive termination process includes the following steps.
Establish expectations and communicate any issues or concerns as early as possible. This helps provide legal protection, opportunities to resolve the problem via corrective action, and prevents questions like, “This wasn’t the first time, so why am I being informed now?”
Without documentation, organizations can’t prove a corrective action plan took place if the terminated employee pursues legal action.
If corrective action primarily focuses on improving performance rather than behavior or other policy violations, it should involve a formalized and documented PIP to help protect the employer and provide the employee with a roadmap.
Before terminating an employee, discuss the decision with the appropriate department heads and team leads as needed to solicit their input. Multiple accounts of workplace violations or issues will help provide evidence of reasonable termination and “just cause.”
Before calling the employee in for the termination meeting, prepare yourself and all the items you’ll need for the meeting, including:
Make sure to give yourself and your teams enough time to prepare these documents, which may take payroll or other departments a few hours to process.
Termination meetings should happen discreetly. Aim for a time of day that offers employees more privacy, like the start of their day.
Provide the employee with all necessary termination documents — like a Change of Relationship form and unemployment resources like California’s DE2320 — along with their final check.
Here are a few special considerations for final checks to keep in mind:
Remove or disable the employee’s access to digital tools and company portals immediately following termination. Employers generally remember to enforce physical security, such as reclaiming badges and changing building codes, but they often forget to revoke digital access. Revoke access or change the passwords to all user accounts assigned to the terminated employee, especially if they involve cloud access.
In addition to digital access, terminated employees must return any company property in their possession. While employers can’t withhold a final check until an employee returns the property, they may be able to deduct replacement costs depending on state laws.
Following an employee termination, be proactive in informing their team members and other relevant parties — like collaborating departments or third-party contacts for accounts they managed — but keep the information to the minimum. Be prepared to hold meetings for any employees who may have related concerns over the termination, such as potential organizational changes or whether more terminations may follow.
Getting in front of the news allows you to prevent rumors and inaccuracies from spreading and helps reassure your employees after a surprising termination.
Navigating a termination presents any organization with a challenge that requires HR expertise, and BBSI’s professionals are always ready to help.
When organizations partner with BBSI, they receive coaching on corrective action plans and how to conduct feedback or disciplinary meetings before a termination. When a termination occurs, BBSI will assist with the forms, final check, and other processes. Throughout the termination process, our HR Consultants will provide you with the resources you need to keep you progressing toward your goals.
Contact us today to learn more about how BBSI can help you navigate termination difficulties and implement frameworks for a stable workforce.