Employee Terminations

by: Ian K. McEwen

Employee terminations are a part of business life. Laying somebody off can be stressful and complex. Remember, no one person is bigger than the company. We all know that employee turnover has many negative effects on our businesses – company performance, legal costs, morale and productivity issues and personal/emotional issues. The best approach for the employer and the employee is to make this difficult situation a win-win in a positive and respectful way.

Here are some guidelines to ensure an amicable separation:

Document Performance: It is important to document performance issues in the form of performance reviews and written warnings. Issue a series of warnings (3 are often required) in writing (letter or memo) with timelines (often 90 days) which outlines the delinquent behaviour/performance and indicate that if this performance continues, then termination is a potential option. Make sure the signals you are sending to the employee are consistent. Don’t be sending mixed messages that make them think that the behaviour is sometimes OK. Identify the behaviour/performance that is unacceptable and make sure the employee recognizes them. Document (memo to the file) the conversations warning the employee.

Timing: Termination meetings should take place early in the day and early in the week…..never on a Friday or the first day back from a vacation or sick leave. In this way the employer can monitor the workplace and to immediately dispel unchecked rumours. Although not recommended, some companies allow the employee the option of remaining for the rest of the day to say goodbye to co-workers. It is preferred however, that the employee leaves immediately.

Closed Door Meeting: Make sure the termination meeting is conducted in private. It is important that there are at least two company employees present. It is wise to include someone from Human Resources as a witness. The discussion should be open, frank and non-confrontational. Get to the point quickly. Don’t get caught up in the employee’s emotions. It’s OK to show appropriate sympathy, but not empathy. Don’t waiver and don’t change your mind. As long as emotions are kept in check, extend the employee every reasonable courtesy. Don’t be surprised if the terminated employee doesn’t hear your message or may not understand the reasons for their dismissal. Answer any questions the employee may have and don’t get drawn into an argument about your decision.

Prepare Details: When everything is ready, call the employee into the private office with “I have a matter to discuss with you.” Much like you saw in the movie “Up in the Air” starring George Clooney, make sure you are prepared in advance with the employee’s entitlements – severance pay, vacation pay, benefit continuance, expense reimbursements, accrued bonuses, and pension fund issues. The employee’s Record of Employment should be completed in advance to allow the employee to register for unemployment benefits. Companies should outline the specific date of departure, including the return of all company owned property and internet discontinuance. The employer should also explain their policy of providing references – written letters of recommendation, or verbal feedback. Review any non-competition or confidentiality agreements which may affect the employee’s ability to find employment in the same field. Determine the eligibility for outplacement and if applicable, have a representative of the outplacement company available at the time of termination.

Severance Pay: If you are dealing with a unionized worker, the collective bargaining agreement will spell out the terms and conditions of what is owed. If the employee is not part of a bargaining unit the compensation guidelines are cloudy. In most circumstances, provincial governments require employers to offer one week‘s notice for every year worked up to a maximum of eight weeks. This is however much lower than what the courts “common law” traditionally dictates in litigation. Nailing down the right number is difficult. Our advice is to be flexible, fair and just. You might even consider offering the employee a menu of options – lump sum payment, written notice, benefit extension, etc. For specific rules and regulations, check with your provincial Ministry of Labour – Employment Standards Act. Or contact our ‘in-house’ Human Resource Specialist.

Employment divorces, like marriages, can be amicable or contested. In any event, both parties move on.


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