Common Termination Mistakes
Terminating an employee is not fun, no matter how you sugar-coat it. There are bound to be hard feelings and even potentially down-right hostilities upon terminating an employee. In fact, many employers become embroiled in expensive litigation because they make simple but avoidable errors when terminating an employee. Terminating an employee always brings the possibility of a lawsuit but here are some of the most common errors to avoid as business managers, owners and leadership.
- Not Following Human Resources Procedures – When employee x was hired he or she probably was given an employee handbook that detailed the rights as well as the responsibilities of workers. Part of this handbook may detail the steps that an employer will probably take when a termination process has begun. A paperwork trail will probably be a part of any termination from documenting poor performance to misconduct in the workplace. Keep in mind that without adequate documentation, your basis for terminating an employee may appear to be groundless and lack substance.
- Not Having Just Cause for Termination – In many states, workers are employed ‘at-will,’ which means that employers can terminate an employee at any time. This isn’t completely true. There are some groups that are protected for reasons such as: age, gender, race, religion or disability. Many lawsuits can be avoided or won by employers who base their termination decision on a ‘just cause’ or who provide a legitimate reason for the employee’s termination. A ‘just cause’ reason must have its foundations based on facts or proof.
- Failing to Give Adequate Termination Notice – Should an employer terminate an employee without a prior warning, the onus is on the employer to prove that the employee should have known they would be terminated based on their actions. Avoid this situation by giving the employee notice that if they commit the same or related infraction again, they will be terminated.
- Discontinuing Employees’ Insurance Benefits (on the date of dismissal) – According to Employment Law 101, Many employers have a policy of discontinuing dismissed employees’ benefits on the date the employees are dismissed. In particular, long-term disability (“LTD”) insurance is often immediately discontinued.Employers who follow this policy often fail to realize that the dismissed employees’ entitlements to LTD benefits do not end simply because the benefits have been discontinued. Instead, the employer has made the decision to step into the shoes of the insurer. The dismissed employee’s LTD benefits continue with the employer potentially liable to pay any LTD claim.