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No one ever wants to terminate an employee. Not only is it an awkward social situation, but it also requires companies to comply carefully with the rules surrounding employment. Handling terminations poorly can result in expensive legal consequences.

This article outlines what companies should know about being terminated, types of termination, termination processes, and more.

What Does Being Terminated Mean?

Being terminated means that an employer fired an employee. The voluntary or involuntary termination signifies that employment ends. State and federal laws determine how companies should handle employee terminations.

Here is a web page about the termination of employment.

Types of Termination

There are two types of termination, including voluntary and involuntary. Both carry different legal implications and follow various protocols according to company policy and culture.

Let’s take a closer at the differences between voluntary and involuntary termination below:

Voluntary Termination

Voluntary terminations refer to when an employee voluntarily resigns. Examples of voluntary terminations include company policy resignations, retirement, taking a position with another company, and going back to school.

Involuntary Termination

Involuntary terminations refer to when an employer terminates an employee. Examples of involuntary termination include layoffs, poor company performance, and downsizing. Involuntary termination may offer the aggrieved employee benefits, such as severance pay or severance packages.

Both types of termination require company managers to comply with local employment laws and contract rules. Speak with employment lawyers to review your termination process to ensure that you comply with local, state, and federal employment laws.

Process of Termination

Employee termination is sometimes unavoidable. After all, you have performance goals and financial objectives to meet. Ensure that you take a measured and consistent approach to terminating employees.

Below, we have outlined the eight steps you should take when going through the process of termination with your workers:

Step 1. Speak with the Employee About Issues

Employees should receive notice that they violate your company’s policies. Some employees may only require a warning, whereas more severe incidents require immediate removal. Let the employee know what they did and how they can avoid future violations.

Step 2. Monitor the Employee’s Progress

The employee should receive a reasonable opportunity to demonstrate compliance going forward. Doing so allows you to retain an already-trained worker while building trust with your staff overall. You could also continue to experience issues with the employee, which may warrant the need for termination.

Step 3. Escalate the Issue with Human Resources

Speak with your human resources manager before terminating your employee to ensure all documentation is in order, including severance agreements, employee separation agreements, employee severance agreements, and more. Following through on your contractual obligations is essential to protecting your company.

Step 4. Set the Stage for Termination

Consider where you will physically inform your employee that you are terminating their employment. The best place to fire a worker is in a private setting and away from prying eyes. However, it is crucial to have a witness present during the termination meeting to protect both the employer and employee. A tactful termination can prevent negative consequences from arising and communicates respect for their situation.

Step 5. Prepare Before Your Meeting

Take a few minutes to outline what you want to say before meeting with the employee and actions to take following the discussion. Some companies require immediate removal of the premises with security regardless of the circumstances. You should always have a plan of action in place to curry the most favorable outcome.

Step 6. Meet with the Employee

Avoid mincing words when terminating an employee and get straight to the point. You should also quickly provide a reason as to why since this feedback can provide tremendous personal value to them and legal protection for you. It is okay to answer their questions for clarification but make sure that you stick to the facts.

Step 7. Document the Termination

It is critical to create and retain documentation surrounding employee terminations. You may need to call upon the details of the situation in the future, and these records can prove invaluable. Retain records for at least seven years as a general rule of thumb, depending on the local laws and regulations. Check with a lawyer in your area to determine the appropriate retention period.

Step 8. Rescind Access to Company Systems and Property

Allow the employee to collect their personal belongings and rescind their key, employee ID, and other company property. Restrict access to your company’s computer systems and change passwords, locks, and door codes to prevent unauthorized usage. This step’s objective is to ensure they do not have access to your company’s private property.

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Termination of Employment Reasons

State and federal laws give your company the right to terminate employees, and rules vary according to the state in which you operate. For instance, you should find out if your state laws follow right to work or at-will employment doctrines since both significantly impact legitimate reasons for termination.

Seven most common reasons for termination include:

  • Reason 1. Incompetence: Incompetence is when an employee fails to perform and meet expectations relative to the progress of your other staff members over time. Try to incorporate numerical meaning from performance reports so you can explain exactly where they failed.
  • Reason 2. Employee lies on their resume: Falsified resumes are when an employer discovers that the employee lied about their career and educational accomplishments. You have the legal right to terminate employees for falsified resumes if you discover it during their course of work.
  • Reason 3. Absenteeism: Excessive absences have a negative impact on your bottom line when they exceed standard time off policies.
  • Reason 4. On-site criminal activity: You do not have to retain a worker that commits crimes on your property. Some employment contracts require termination even if the crime occurred during off-hours.
  • Reason 5. Work attitude: Overtly unpleasant, harmful, divisive people can affect the productivity of those around them. These cases are challenging to prove if you terminate the employee, so ensure that you carefully document social and attitude problems, including specific acts.
  • Reason 6. Sexual harassment: Sexual harassment is never okay regardless of gender or age. Terminate employees who engage in sexual harassment. You should also investigate these claims beforehand to prevent future legal issues from arising.
  • Reason 7. Insubordination: Employers have a reasonable expectation that employees will follow company policy. When repeated violations occur, you can terminate employees based on insubordination.

Your employee hiring, evaluation, training, and termination processes should remain objective through every employee’s employment duration. If your human resources follow specific protocols, you make it easier for courts to understand your side of the story should a wrongful termination case arise.

Learn about employee code of ethics and employment handbooks.

At-Will Employment

At-will employment is when employers and employees share a relationship based on the understanding that either party can terminate their relationship at any time and for any reason. These types of employment relationships do not require two weeks’ notice or a resignation later . Employers have the right to change the terms and conditions of the employment relationship as they see fit, including compensation and job duties, without any employee’s notice or consent. However, some employee contracts or company policies may require a specific notice period or resignation letter.

There are exceptions under at-will employment, such as public policy, implied contracts, and retaliation. Ensure that you follow the laws of your state carefully to avoid wrongful termination claims in the future. Employment lawyers will navigate the complexities surrounding employment contract reviews on your behalf while helping you manage employment contract costs.

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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


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