Sometimes, things don’t work out with your employee. Sometimes, you need to let them go. As with so many things, there is a right way and a wrong way. Of course, when it comes to liability, you need to make sure you have done things the right way.
If you have an employee handbook (you do, right?), it should outline most of the important items for the termination of an employee. If so, you can terminate your employee without any further action. There are a few things you want to protect if you are terminating an employee.
Remember, you can terminate your employee for any reason or no reason, unless your reason would violate anti-discrimination laws or if the reason would violate public policy. So, you can fire someone for any reason except:
- National Origin
- Filing a Worker’s Compensation Claim
The problem with having exclusions to the “any reason” doctrine is that you must establish you have not fired someone for a reason that is protected. That is why it is important to document everything clearly at the time it happens. If you properly document everything, it will help you later if you need it. There are a couple of times the issue of why someone was fired is important:
- Unemployment Claims
- Discrimination Claims
Even though you have the right to fire your employee for any reason or no reason, that does not mean there are no consequences. If your employee brings an unemployment claim, you will need to establish they were fired for cause to avoid an increase in your unemployment fees. Proper documentation helps in this. You want to be able to establish the reason the employee was fired and the steps you took before they were fired. This can help to establish there was cause, and that the cause was a permitted cause and was not based on one of the exceptions above.
It is a good idea to have a process for warning your employees (that should be outlined in your handbook) of their misconduct before they are terminated. You may want to give a verbal warning, then a written warning, before a termination letter. This is called progressive discipline. Let’s talk about these steps:
Tell the employee what they are doing wrong. Be specific and tell them how to correct it. Verbal warnings, however, do not hold up very well. It is your word against the employee’s word. The best way to solve this is to write a memorandum for the file. This needs to be something you do with all of your employees and you should create a template and a process for this. If you use the template and you always document the verbal warnings, it will become evidence of what you have told the employee.
I have created a template that you can use to document issues items with your employee. Click below to go to the page to download and access the quick start guide on how to get started using this employee file template. This can be used for many issues with employees. Use it regularly, this will make it admissible. It needs to be a part of your business process.
Corrective Discipline Letter
If the problem persists once you have verbally warned your employee, you need to take further steps and provide a written document to your employee outlining what the problem is and the steps that should be taken to correct the issue. This needs to be delivered in a way you regularly communicate with your employee (email, hand delivery, inbox). You need to make sure you can document they have received this letter. You also need to include a copy to the file and any other relevant supervisors of the employee.
I have created a template for this as well. Click here to go to the information page to download and access the Quick Start Guide on how to get started with and make this document a part of your template arsenal to protect your business. This is designed to cover issues with your employees. Use it regularly as a part of your employee discipline. Not using it may harm you.
A termination letter is more than simply a letter that tells your employee he is fired. That is something you should do verbally. A termination letter is not a place to air your grievances or list all of the issues you have had with your employee. A termination letter is an offer to your employee to allow them to continue working at full pay for a described amount of time. The letter requires the employee to follow certain guidelines during this continued employment.
The termination letter is a brief contract of employment.
With a termination letter you are offering to pay your employee wages to continue working for a specified period of time on the condition they agree to certain terms. Typically, you want to lock down the employee to release you from any claims, not to disclose trade secrets (though this should have been handled in your employee handbook or other employment documents), and not to disparage the company when they are finished. They must agree (and sign) to continue to receive wages. Otherwise, they are immediately terminated. Basically, the termination letter is your conditioned two weeks’ notice to your employee.
If your employee begins to behave and follows your offer, you can continue paying them for the length of time you indicated in the letter. If, however, they continue to exhibit the issues you outlined in the letter, they are in breach of their employment agreement (the termination letter) and can be terminated for cause immediately. You will still have their agreement that they will not sue you or disparage you or disclose your trade secrets. So, if they do try to come after you, you can prove they agreed not to.
Make sure to document any occurrences of the problem after the termination letter. Make sure you have proof other than someone’s word. If you terminate an employee before the term stated in the termination letter, just make sure you have documented evidence of their breach of the termination letter provisions.