Business owners sometimes tend “jump-the-gun” when it comes to terminating an employee, and aside from any direct cases with an immediate firing need, you may want to consider following these steps before you pull the plug on their time at your business:
Review Company Policies and Documents
Before doing anything, you’ll want to review your company’s policies specific to letting an employee go and look over any documents they may have signed. Certain policies and documents in place that may constrain your right to terminate include:
- Employment At-Will Policies
- Progressive Discipline Policies
- Internal Dispute Resolution or Arbitration Policies
- Termination Policies Requiring “Just Cause”
- Written Employee Contract
If an employee has signed a handbook or contract with any of the aforementioned items, you will want to review those sections carefully to ensure that you don’t infringe upon any of the policies you and your HR advisor may have created.
Oral or Implied Contracts of Employment
Have any oral contracts been presented to the employee such as, “your job is secure” or “you will always have a job if you are performing well”? If these statements have been made to an employee by someone in the company with authority over them, they are considered forms of oral guarantees of employment. Some other forms of oral or implied contracts include:
- Long-Term Employment (usually over 5 years)
- Lack of Criticism of Employee’s Performance
- Indicators of Job Security (i.e. extensive benefits)
State and Federal Laws Protecting Employees
Some laws have been put into place at the state or federal level that protects some employees such as:
- The Americans with Disabilities Act
- Title VII – California’s Fair Employment Housing Act
- FMLA/CFRA Interference
You’ll want to be sure to review if any of these laws may be relevant to your employee. If you aren’t sure, get in contact with your HR department or a locally trusted HR advisor.
Look Over Their Employee Personnel File
An employee personnel file may contain important information that’ll you’ll want to know while making a termination decision:
- Date of Hire
- Performance Review Information
- Merit Increase Information
- Written Warnings from Supervisors
- Attendance Records
After reviewing these files, you may want to compare your findings to that of another employee to ensure that a decision of termination is not viewed as discriminatory. An example of such a situation would be a female employee facing being fired for attendance issues while a male employee has the same attendance issues and is not facing termination.
Employee Eligibility for Unemployment Insurance
If an employee is terminated, they may be eligible for unemployment insurance unless they have been let go for refusal to perform suitable work or for misconduct. The mere inability to perform job duties is not considered misconduct.
In many cases, it may be more costly to your unemployment insurance reserve than it would be to provide an employee facing termination with the necessary training or performance counseling for improvement.
Consider Legal Ramifications of Not Terminating an Employee
If an employee has threatened violence to anyone associated with your business, you could face employer liability. If an employee has violated sexual harassment laws, termination may be necessary in order to fulfill your legal obligations as an employer.
Key Takeaways for Review Before Termination:
- Company Policies and Documents
- Oral or Implied Contracts of Employment
- State and Federal Laws Protecting Employees
- Employee Personnel File
- Employee Eligibility for Unemployment Insurance
- Legal Ramifications
Before letting an employee go, you’ll want to review all the aforementioned aspects of their possible termination. While some instances may call for the immediate action of terminating the employee, others may need much more deliberation. Contacting a Human Resources representative can give you further guidance for any specific circumstances under which you are considering letting an employee go.
Get in contact with us today. RTR Consulting has more than 20 years devoted to developing effective and efficient human resources policies, procedures, and best practices for small, start-ups, and medium-sized businesses.