One of the most difficult situations you can face as a small business owner is having to terminate an employee. The situation is often emotional, but it is also fraught with legal pitfalls.
How, then, do you fire an employee while protecting yourself and your business?
Follow these important steps.
The 4 steps to terminate an employee
Document issues and create plans for improvement
An employee should never be shocked when they are fired. Instead, they should be aware of the issues that have led up to their termination. Given this, it is vital to document any problems that arise with employees, as well as to address them with the employees in question. Once the issues have been outlined, create a plan for the employee’s improvement, including a timeline for this improvement to be completed.
Prepare termination documentation
If the employee in question does not make the required improvements, then you can begin termination documentation. At this point, you also need to calculate any severance that would be owed to the an employee you are terminating. Keep in mind that the statutory requirements are the minimum amount of severance required, so you may need to talk to a lawyer to determine how much is appropriate in a particular case.
Meet with the employee
Now is the time for the meeting to terminate the employee. At this meeting, do not let emotion take over – and do not say anything that could leave you open to a wrongful dismissal lawsuit. Instead, briefly explain the reasons for the termination and when the employee is being asked to leave. Depending on the situation, you may wish to have a witness at the meeting. This witness could be a member of you HR department, or your lawyer.
Handle the aftermath
You want to help keep the aftermath of the firing as smooth and respectful as possible. Make sure the employee has a clear termination date. In the case of restructuring, this date may be a week or two down the road. If there are clear employee issues, however, it is best to terminate the individual at the end of their last day. If the employee needs to be escorted from the building, keep the walk out as low-key and calm as possible. You may also want to address the situation directly with the employee’s colleagues in order to prevent rumours. If you do have this conversation though, keep your statement brief, to the point, and stick to the facts.
The best way to protect yourself and your company as you terminate an employee
Whenever you terminate an employee, there is always the potential for them to file a lawsuit against you. The best way to protect yourself? Working with a small business lawyer.
Make sure to meet with your small business lawyer prior to starting the termination process. At this meeting, review the situation and ensure you are in the position to legally terminate the employee. Then consult with your small business lawyer along the way to make sure you are following the appropriate termination process.
Another key way to protect yourself in the event that you need to terminate an employee is to have employee contracts. These contracts should be signed at hiring and should lay out information about a number of areas, including termination.
If you are ready to prepare your employee contract or need assistance in terminating an employee, reach out to us today.