Posted on February 5th, 2018
Terminating an employee is always tough and I know something you don’t take lightly.
Besides the personal difficulty for you there is some potential for legal headaches as well. Yes California is an “at-will employment” state but some employees might take being let go easily.
Even if you did nothing wrong the labor laws are stacked on their side and some might pursue legal actions against you.
Read on to learn how to avoid wrongful dismissal claims.
Terminating an employee is never a happy time, but it gets much worse when they turn to legal action.
The average wrongful termination settlement costs a business around $40,000. But sometimes termination is the only choice.
So what can you do as a company do to dismiss an employee without litigation?
Of course its helpful to have a termination checklist to follow so no steps are missed.
Below, we’ve put together some key steps you can take to avoid wrongful dismissal claims.
Try Corrective Action
Except for cases of severe misconduct, you should try to dismiss an employee only as a last resort.
Firing an employee on the grounds of poor performance (for example) without addressing the situation first could become the basis for a wrongful dismissal case.
Instead;
- Hold performance meetings
- Lay out your concerns and provide actionable targets for improvement
- Review the situation again after a set period of time.
This model also works for behavioral or cultural clashes such as excessive absence or lack of teamwork.
Hiring new staff is an expensive process, so it’s also in your interest to make the most of the employees you already have. Showing you’ve invested in your employee will prove the grounds for their dismissal if it does eventually happen.
Follow a Termination Process
A good policy and a process to support it are vital in many areas of modern business. The dismissal process is no different.
Dismissal shouldn’t mean walking up to an employee’s desk and telling them they’re fired. The process should follow a written document available for all staff to read.
Make this process humane and considerate. Try to incorporate the alternatives to dismissal we outlined in the last section.
Your process should always include a measure of privacy. You should hold relevant discussions in face-to-face meetings with your employee, not in a public venue.
This process should also outline a grievance procedure.
This gives an employee the tools to argue against unfair treatment while they’re with the company. Having these discussions before termination could prevent them coming up again later on.
Use your HR team
In its most cynical sense, a human resources team is there to protect you from your employees.
Of course, an HR team does a lot for both parties. But legally speaking, they’re one of your best defenses against a wrongful dismissal suit.
Your HR team should have the training and knowledge to carry out a dismissal while following the letter of the law. Most of what we mention in this article is stuff they should already know.
In other words, if you have an HR team and they’re not involved in dismissals, then you’re doing something wrong.
Speak to HR as soon as you have an issue with a staff member. They’ll give you pointers on how to deal with the situation. If the situation does continue to develop, invite HR to sit in on meetings.
The last thing your HR team will want is the shock of finding out about a dismissal through the wrong channels. Involve them from the beginning for a smoother process.
Involving HR also shows your employee that you’re doing everything by the book. Employees know that HR is also there to look out for their rights, so if they have any concerns, they can speak to HR directly.
Have Solid Grounds
Don’t even think about terminating with a wishy-washy reason. And even if you do have a strong reason, be sure to explain it clearly.
Difficult conversations are never fun, but they’re better than legal action. Say you’re letting an employee go for poor performance, and they’ve shown no improvement after several warnings. Don’t then try to tell them they don’t “fit the company ethos”.
Be honest. Be specific. And ensure you are not letting them go for any of the “protected reasons“.
An employee’s first reaction to termination is usually confusion and dismay. The more information they have, the less likely they are to go on the attack.
If you’re vague, you could end up in litigation from an employee who would otherwise have understood your position.
Once again, involve HR in your discussions. They’re trained to handle these conversations and can ensure your reasons come across as professional and business-focused.
Remember the Human Element
Business is sometimes brutal. In the thick of things, we don’t want to forget that your employees are people, not numbers on a spreadsheet.
Remember that by dismissing someone, their livelihood is going away. You might not know what new challenges you’ve laid at their door. Will they lose their home? Their ability to support a family?
Even if they are totally at fault they might respond in anger in the best way they know how to get back at you. A lawsuit!
Approach dismissals with all the compassion you can. Be kind and understanding. Even if your employee reacts badly, stay professional and composed.
The better you treat someone upon dismissal, they less likely they are to feel wronged.
And if they get emotional or angry, you should be in a position to say you kept things professional.
The Written Record
Don’t treat dismissal as a casual conversation.
Keeping thorough documentation of the dismissal means you have evidence if a case arises. You should have thorough records of any conversations and performance reviews that led to the decision.
As we’ve mentioned, involve HR. Having an HR rep in meetings is a great way to ensure you have written proof that you followed all legal steps.
Back up your meetings with typed letters to your employee. That way, they can’t claim lack of knowledge.
If meetings result in dismissal, give them a final letter spelling out the reasons and final employment date.
The process we’ve mentioned before should also be thoroughly documented. Spell out grounds for dismissal in your staff contracts. Provide a handbook to new employees laying out the process.
The more information your employees have in advance, the better they can see you’re handling the situation professionally.
Avoid Wrongful Dismissal Claims
Of course, it’s also important that you’re following the law when it comes to terminations – such as avoiding discrimination.
But assuming you’re meeting legal requirements, the above steps should help you avoid wrongful dismissal suits. If one does come up, you’ll have the tools to fight it.
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