The decision to terminate an individual’s employment carries with it the risk of many possible legal challenges. This is one case where you definitely want to make sure you’ve done your homework. Even just one wrongful termination can cause lasting damage to your company.
Did you know that employee lawsuits against employers have risen by more than 400% over the last twenty years? And there’s a significant bottom-line impact when things go down that road. The average employee lawsuit against a mid-sized employer takes 275 days to complete and comes with a $125,000 price tag. Ouch. And that’s just the legal fees. Many of these suits end up being settled, which means a payout happens in order to have the case resolved. If that doesn’t happen, then you might also be looking at significant lost productivity from various employees having to appear in court. The whole thing quickly becomes an expensive nightmare. One way to avoid costly litigation is to maintain a legally compliant HR department by creating and following a termination checklist. Here are the most important things you should have on your checklist:
Show Cause. No matter what kind of employment contract you use, the only way to avoid potential legal trouble is to make sure you have a legitimate reason for firing someone. And you also want to sure your action can’t be construed as discriminatory based on age, race/color, religion, national origin, sex, etc. or retaliatory for something they did like being a whistleblower.
Corrective Action Process. Besides showing you have a good reason for a termination, you also need to be able to show you did everything you could to correct the situation, that you gave the person as many opportunities as possible to improve. This also implies that you were giving them substantial feedback all along the way as well. This is all part of the robust paper trail mentioned above.
Performance Reviews. Performance reviews at many organizations are a joke, until it comes time to fire someone and you realize your performance reviews don’t offer any assistance in making your case. Make sure your performance review system does what it’s supposed to do, accurately measure a worker’s performance over time. It can be a key aspect of a termination process that avoids legal challenges.
Offer Coaching Opportunities. If you approach problems with employees from a coaching or mentoring perspective, you’ll automatically create a more inspiring, positive context that offers a greater chance for the employee to actually make improvements. In offering such coaching, make your discussions open and honest, be prepared to help eliminate barriers that may stand in the way of the employee improving performance (such as additional training), create an action plan with clear steps, and set a timetable for additional follow-up and review. The more you can show that you’ve made a real effort to work with the employee to improve the situation, doing everything possible to turn it around, then you’ll have an easier time with the termination if real improvement is not forthcoming.
The Termination Meeting. Your approach here is important. Do it as kindly as possible without being apologetic. If you’ve documented your rationale along the way, there’s nothing to feel bad about.
Managing Termination: Your Legal Responsibilities (ID: TMC022) is an eLeaP Video On Demand eLearning module to provide guidance on applying the five principles of the fairness factor to make sure terminations are handled in a way that minimizes legal risk. From how to prepare for a termination with a robust paper trail to conducting the actual termination meeting itself, this is one training you can’t afford to pass up for all your managers. Sign up now for a free preview of this course.