Employee termination - adhering to the legal and ethical standards

Employee termination is not a process any business owner or manager enjoys, but there are times when even a valued worker becomes redundant.

Whether you are firing someone for poor performance or being forced to cut jobs in tough economic times, there is much you can do to make the process as pain free and smooth as possible for all concerned. This is important not only for those in the firing line, but also for your remaining employees.

Master the employee termination law jungle

“Your first step must be to talk to your legal advisor,” says consultant John Broweleit from Anson Partners. “Different companies use different employment contracts, laws vary between states, and industrial awards may also need to be taken into account.”

Your legal advisor will be able to offer counsel on where you stand and how you should proceed. That said, there are a number of key issues that John considers important for all business owners and human resources personnel to understand when it comes to employee termination.

Give respect, earn respect

If you treat a departing employee with respect, it is far more likely they will offer you the same in return, thereby avoiding major problems.

Too often, however, employee termination is handled badly and in haste, says John. This can cause resentment and lead to trouble down the track, or even legal action if an employee sues for wrongful dismissal.

Explore alternatives to employee termination and offer assistance

Looking at all possible options, such as redeployment to another part of the company, or even asking around among your business contacts, can show your concern and respect.

Employee termination can be a very difficult time financially, too, so offer as much remuneration support as possible. You may also choose to contract an Outplacement Services provider, who can help the employee adjust to the loss of their job and assist with applying for new roles.

Secure the loyalty of your remaining staff 

“Insensitive employee termination can really put the wind up other employees,” warns John. “They may start to wonder whether they are next on the chopping block, whether they’ll be treated the same way, and even if yours is a company for whom they want to work.” 

Handled well, on the other hand, employee termination can actually help build respect from your team. Just make sure to explain what is going on and why, and offer whatever reassurances you can.

Think ahead to the future 

Above all, remember that actions speak louder than words. How you effect an employe termination now may well have repercussions in the future, particularly in times of skills shortages. Your reputation as an employer of choice - or one to be avoided - may rest on it.  

So if you want advice on employee termination procedures, get in touch with a consultant who understands the issues involved and can help you all move ahead: